<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

                [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   for the fiscal year ended December 31, 1998
                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 1-11781

                           DAYTON SUPERIOR CORPORATION
             (Exact name of registrant as specified in its charter)

          Ohio                                        31-0676346
(State of incorporation)                    (I.R.S. Employer Identification No.)

                           7777 Washington Village Dr.
                                    Suite 130
                               Dayton, Ohio 45459
                     (Address of principal executive office)

Registrant's telephone number, including area code:  (937) 428-6360

Securities registered pursuant to Section 12(b) of the Act:

                                                         Name of each exchange
      Title of each class                                on which registered
      -------------------                                -------------------
      Class A Common Shares, without par value           New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes  X  No
                                       ---   ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

As of the close of business on March 18, 1999, the aggregate market value of
voting shares held by non-affiliates of the registrant (determined by
multiplying the highest selling price of a Class A Common Share on the New York
Stock Exchange on such date by the total number of Class A Common Shares
outstanding not beneficially owned by directors or officers of the registrant)
was $106,712,229.

Number of Class A Common Shares, outstanding on March 18, 1999 5,945,130

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for the Annual Meeting of
Shareholders scheduled to be held on May 12, 1999 (definitive copies of which
will be filed with the Securities and Exchange Commission within 120 days after
December 31, 1998) are incorporated by reference in Part III of this Report.


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                                     PART I
ITEM 1.        BUSINESS.

GENERAL

               Dayton Superior Corporation (the "Company") believes it is the
largest North American manufacturer and distributor of metal accessories and
forms used in concrete construction and of metal accessories used in masonry
construction. The Company's products are used primarily in two segments of the
construction industry: non-residential building projects such as institutional
buildings, retail sites, commercial offices and manufacturing facilities; and
infrastructure projects such as highways, bridges, utilities, water and waste
treatment facilities and airport runways.

               The Company's distribution system consists of a network of ten
manufacturing/distribution plants and 47 service/distribution centers in the
United States and Canada and over 4,000 dealers across North America. The
Company also rents forming systems and tilt-up bracing to contractors through
rental centers and distributors nationwide. The Company's customers include
stocking dealers, brokers, rebar fabricators, precast concrete manufacturers,
brick and concrete block manufacturers, general contractors, subcontractors,
distributors of construction supplies and metal fabricators.

               The Company manufactures most of its products at ten
manufacturing facilities in the United States, using, in many cases,
high-volume, automated equipment designed and built or custom modified by
in-house personnel. The Company sells products in four principal product lines:
concrete accessories, concrete forming systems, paving products, and masonry
products.

               Since 1990, the Company has completed thirteen acquisitions, the
largest of which was its 1997 acquisition of Symons Corporation ("Symons").

               The Company was incorporated in 1959. The Company's principal
executive offices are located at 7777 Washington Village Dr., Suite 130, Dayton,
OH 45459, and its telephone number is (937) 428-6360.

PRODUCTS

               Although almost all of the Company's products are used in
concrete or masonry construction, the function and nature of the products differ
widely. The Company currently offers more than 18,000 different items and
believes its brand names, such as Dayton Superior(R), Dayton/Richmond(R),
Symons(R), Richmond Screw Anchor(R), Dur-O-Wal(R), and American Highway
Technology(R), are widely recognized in the construction industry. The Company
continually attempts to increase the number of products it offers by using
engineers and product development teams to introduce new products and refine
existing products.

               Concrete Accessories. The Company manufacturers and sells
concrete accessories primarily under the Dayton/Richmond(R) brand name. The
Company's concrete accessories products comprise wall-forming products, bridge
deck products, bar supports, precast and prestressed concrete construction
products, tilt-up construction products, plastic and


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elastomeric formliner products, and chemicals used in concrete construction. Net
sales of concrete accessories before intercompany eliminations accounted for
approximately $128.1 million, or 45%, of the net sales of the Company in 1998.

               Wall-forming products, such as snap ties, coil ties, she bolts
and he bolts, are used in the fabrication of job-built and prefabricated modular
forms for poured-in-place concrete walls. The products, which generally are not
reusable, are made of wire or plastic (or a combination of both materials) and
generally are manufactured by the Company on customized high-speed automatic
equipment.

               Bridge deck products (used to support the formwork of bridges)
include hangers and sidewalk overhang brackets (used to support the formwork
used by contractors in the construction and rehabilitation of bridges), coil
nuts and bolts, haunch carriers, screed supports and cast wing nuts.

               Bar supports are non-structural metal or plastic accessories used
to position rebar within a horizontal slab or form to be filled with concrete.
Bar supports are often plastic or epoxy coated, galvanized or equipped with
plastic tips to prevent creating a conduit for corrosion of the embedded rebar.
The Company sells more than 100 basic types of bar supports in a wide variety of
standard and custom sizes and finishes.

               Precast and prestressed concrete construction products, such as
anchors, inserts, holddowns and pushdowns, are used in the manufacture of
precast concrete panels and prestressed concrete beams and structural members.
Precast concrete panels and prestressed concrete beams are fabricated away from
the construction site and transported to the site for erection. Precast concrete
panels are used in the construction of prisons, freeway sound barrier walls,
external building facades and other similar applications. Prestressed concrete
beams use multiple strands of steel under tension embedded in concrete beams to
provide rigidity and bearing strength, and often are used in the construction of
bridges, parking garages and other applications where long, unsupported spans
are required.

               Tilt-up construction products include a complete line of inserts,
lifting hardware and adjustable beams used in the tilt-up method of
construction, in which the concrete floor slab is used as part of a form for
casting the walls of a building. After the cast walls have hardened on the floor
slab, a crane is used to "tilt-up" the walls, which then are braced in place
until they are secured to the rest of the structure. Tilt-up construction
generally is considered to be a faster method of constructing low-rise buildings
than conventional poured-in-place concrete construction. Certain tilt-up
construction products can be rented as well as sold.

               Formliner products include plastic and elastomeric products sold
for use in the forming of textured surfaces and in architectural work.

               Dayton/Richmond(R) also provides a broad spectrum of liquid
chemicals and cementitious products used in concrete construction.

               Concrete Forming Systems. The Company's Symons(R) subsidiary
manufactures, sells, and rents concrete forming systems. The Company's concrete
forming systems products


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include standard and specialty concrete forming systems, shoring systems and
accessory products. In addition to the sale of prefabricated forming equipment,
the Company also rents forming products to benefit from their durability and
relatively high unit cost. Net revenues before intercompany eliminations
relating to concrete forming systems accounted for $99.5 million, or 35%, of the
Company's 1998 net sales.

               Concrete forming systems are reusable modular molds which hold
liquid concrete in place on concrete construction jobs. Standard forming systems
are sold or rented for use in the creation of concrete walls and columns.
Specialty forming systems consist primarily of steel forms that are designed to
meet architects' specific needs for concrete placements.

               Shoring systems include aluminum beams and joists, post shores
and shoring frames used to support deck forms and other false work while
concrete is being poured.

               Construction chemicals sold by Symons(R) include form release
agents, curing compounds, grouts and epoxies and other chemicals used in the
pouring, stamping and placement of concrete.

               Paving Products. The Company's paving products consist primarily
of welded dowel assemblies and dowel baskets used to transfer dynamic loads
between two adjacent slabs of concrete roadway. Paving products are used in the
construction and rehabilitation of roads, highways and airport runways to extend
the life of the pavement. The Company sells paving products primarily under the
American Highway Technology(R) name but also offers some products under the
Dayton/Richmond(R) name. The Company manufactures welded dowel assemblies
primarily using automated and semi-automatic equipment. Sales of paving products
were approximately $31.0 million, or 11%, of the Company's net sales in 1998.

               American Highway Technology(R) also sells epoxy services and
ancillary products such as joint sealant projects and transverse bar assemblies
that tie the roadbed and berm together. In addition, the division distributes
chemicals specific to concrete road construction.

               Masonry Products. The Company's Dur-O-Wal(R) subsidiary
manufactures and sells masonry products. The Company's masonry product line
consists primarily of masonry wall reinforcement ("MWR") products, masonry
anchors and other accessories used in masonry construction and restoration.
Sales of masonry products accounted for approximately $24.3 million, or 9%, of
the net sales of the Company in 1998.

               Dur-O-Wal(R) believes that it is the largest manufacturer of MWR
products in North America. MWR products are wire products that are placed
between courses of masonry and covered with mortar to add tensile and structural
strength to masonry walls in order to control shrinkage and cracking, to provide
the principal horizontal reinforcement in engineered masonry walls, to bond
masonry wythes (single thicknesses of brick) in composite and cavity walls, to
reinforce stack bond masonry and to bond intersecting walls. The products
improve the performance and longevity of masonry walls by providing crack
control, greater elasticity and higher ductility to withstand seismic shocks and
better resistance to rain penetration.


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               Dur-O-Wal(R) has the in-house ability to produce hot-dipped zinc
galvanized finishes on MWR products. "Hot-dip" galvanizing occurs after products
are fabricated and requires skilled personnel and special systems to prevent the
products from adhering to one another. Hot-dipped galvanized finishes are
considered to provide superior protection against corrosion compared to
mill-galvanized finishes. In recent years, model building codes in a number of
regions of the country in which masonry construction is used have been amended
to require use of hot-dipped galvanized MWR products. The Company also
manufactures MWR products with mill-galvanized finishes by applying zinc
finishes to wire prior to fabrication.

               Dur-O-Wal(R) sells other masonry products such as wall ties,
which connect masonry to masonry; masonry anchors, which connect masonry to the
building structure; stone anchors, which attach building stone (generally
ornamental) to the structural frame of a building; restoration products, which
are anchors and ties used in the restoration of existing masonry construction
and for seismic retrofitting of existing brick veneer surfaces; and moisture
control products, such as flashing and vents, which control the flow of moisture
in cavity walls.

               Construction Chemicals. In addition to the other chemical
products mentioned above, the Company's construction chemical products include
form coatings, bond breakers, curing agents, liquid hardeners, sealers, water
repellents, bonding agents, epoxy grouts, and formliners. The Company
manufactures approximately 80% of the construction chemicals it sells, with the
rest being purchased for resale. Chemical sales made through the concrete
accessories, concrete forming systems, and paving products divisions are
included in the total sales for those divisions.


DISTRIBUTION

               The Company distributes its products through a network of 10
manufacturing/distribution plants and 47 service/distribution centers located in
the continental United States and four Canadian provinces. Of these 57
locations, 19 are dedicated principally to the distribution of concrete
accessories, 31 are dedicated principally to the distribution of forming
systems, three are dedicated primarily to the distribution of paving products,
four are dedicated principally to the distribution of masonry products and some
locations carry several of the Company's product lines. Most of the Company's
products are shipped to the service/distribution centers from the Company's ten
principal manufacturing plants; however, a majority of the centers also are able
to produce smaller batches of some products on an as-needed basis to fill rush
orders.

               The Company has an on-line inventory tracking system for concrete
accessories, paving products, and construction chemicals, which enables the
Company's customer service representatives to identify, reserve and ship
inventory quickly from any Company location in response to telephone orders. The
system provides the Company with a competitive advantage since its service
representatives are able to answer customer questions about availability and
shipping dates while still on the telephone. The Company primarily uses
third-party common carriers to ship its products.


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               In addition, the Company uses its distribution system to sell
products which are manufactured by third parties. These products usually are
sold under the Company's brand names, and often are produced for it on an
exclusive basis. Sales of third-party products allow the Company to utilize its
distribution network to increase sales without making significant capital
investments.

CUSTOMERS

               The Company has over 4,000 customers, over 75% of which purchase
its products for resale. The Company's customer base is geographically diverse,
with no customer accounting for more than 5% of net sales in 1998 and with its
ten largest customers accounting for less than 17% of net sales. Customers who
purchase the Company's products for resale generally do not sell the Company's
products exclusively.

               Concrete Accessories. Dayton/Richmond(R) has approximately 2,350
customers, consisting of stocking dealers, rebar fabricators, precast and
prestressed concrete manufacturers, and distributors of construction supplies.
The Company estimates that approximately 90% of Dayton/Richmond's(R) customers
purchase its products for resale. Dayton/Richmond's(R) largest customer accounts
for approximately 3% of its 1998 net sales and its top ten customers account for
less than 20% of its 1998 net sales.

               Dayton/Richmond(R) has instituted a certified dealer program for
dealers who handle its tilt-up construction products. This program was
established to educate dealers in the proper use of the Company's tilt-up
products and to assist them in providing engineering assistance to customers.
Certified dealers are not permitted to carry other manufacturers' tilt-up
products, which the Company believes are incompatible with those sold by the
Company and, for that reason, could be unsafe if used with the Company's
products. Dayton/Richmond(R) currently has 77 certified dealers of tilt-up
construction products.

               Concrete Forming Systems. Symons(R) has approximately 2,500
customers, consisting of stocking dealers, precast and prestressed concrete
manufacturers, general contractors, subcontractors, and distributors of
construction supplies. The Company estimates that approximately 90% of
Symons'(R) customers are the end-users of its products while approximately 10%
of Symons'(R) customers purchase its products for resale or rerent. Symons'(R)
largest customer accounts for approximately 6% of its 1998 net sales and its ten
largest customers account for approximately 25% of its 1998 net sales.

               Paving Products. American Highway Technology(R) has approximately
150 customers, consisting primarily of distributors of construction supplies,
and, to a lesser extent, stocking dealers, general contractors and
subcontractors. American Highway Technology's(R) largest customer accounts for
approximately 15% of its 1998 net sales and its ten largest customers account
for approximately 80% of its 1998 net sales.

               Masonry Products. Dur-O-Wal(R) has approximately 1,600 customers
consisting of stocking dealers, brick and concrete block manufacturers, general
contractors, sub-contractors, distributors of construction supplies, and metal
fabricators. The Company estimates that approximately 90% of Dur-O-Wal's(R)
customers purchase its products for


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resale. Dur-O-Wal's(R) largest customer accounts for approximately 5% of its
1998 net sales and its ten largest customers account for approximately 23% of
its 1998 net sales.


SALES AND MARKETING

               The Company employs approximately 400 sales and marketing
personnel, of whom approximately one-half are salesmen and one-half are customer
service representatives. Sales and marketing personnel are located in all of the
Company's locations. The Company produces product catalogs and promotional
materials that illustrate certain construction techniques in which the Company's
products can be used to solve typical construction problems. The Company also
promotes its products through seminars and other customer education efforts and
works directly with architects and engineers to secure the use of the Company's
products whenever possible.

               The Company considers its engineers to be an integral part of the
sales and marketing effort. The Company's engineers have developed proprietary
software applications to conduct extensive pre-testing on both new products and
construction projects. During 1998, Dayton/Richmond(R)'s engineers designed and
consulted on the construction of the largest and heaviest tilt-up wall
constructed to date in the United States, which was 100-feet high and weighing
150 tons.

MANUFACTURING

               The Company manufactures the majority of the products it sells.
In the case of the Company's concrete accessories, paving products, and masonry
products, most products are manufactured at eight principal facilities in the
United States, although a majority of the Company's service/distribution
facilities can produce smaller lots of some products. The Company's production
volumes enable it to design and build or custom modify much of the equipment it
uses to manufacture these products, using a team of experienced manufacturing
engineers and tool and die makers.

               By developing its own automatic high-speed manufacturing
equipment, the Company believes that it generally has achieved significantly
greater productivity, lower capital equipment costs, lower scrap rates, higher
product quality, faster changeover times and lower inventory levels than most of
its competitors. In addition, Dur-O-Wal's ability to "hot-dip" galvanize
products at its Aurora, Illinois manufacturing facility provides it with an
advantage over many competitors manufacturing MWR products, who lack this
internal capability. Also, the Company has a flexible manufacturing setup and
can make the same products at several locations using short and discrete
manufacturing lines.

               The Company's concrete forming systems are manufactured at two
facilities in the United States. These facilities incorporate semi-automated and
automated production lines, heavy metal presses, forging equipment, stamping
equipment, robotic welding machines, drills, punches, and other heavy machinery
typical for this type of manufacturing operation.


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               The Company generally operates its manufacturing facilities two
shifts per day, five days per week (six days per week during peak months and, in
some instances, three shifts), with the number of employees increasing or
decreasing as necessary to satisfy demand.


RAW MATERIALS

               The Company's principal raw materials are steel wire rod, steel
hot rolled bar, metal stampings and flat steel, aluminum sheets and extrusions,
plywood, cement and cementitious ingredients, liquid chemicals, zinc and
injection-molded plastic parts. The Company currently purchases products from
over 300 vendors and is not dependent on any single vendor or small group of
vendors for any material portion of its purchases.

COMPETITION

               Although the Company believes it is the largest North American
manufacturer and distributor of metal accessories and forms used in concrete
construction and of metal accessories used in masonry construction, the industry
in which the Company competes is highly competitive in most product categories
and geographic regions. The Company competes with a relatively small number of
full-line national manufacturers of concrete accessories, concrete forming
systems, masonry products and paving products, and a much larger number of
regional manufacturers and/or manufacturers with limited product lines. The
Company believes that competition is largely based on, among other things,
price, quality, breadth of product lines, distribution capabilities (including
quick delivery times) and customer service. In certain circumstances, due
primarily to factors such as freight rates, quick delivery times and customer
preference for local suppliers, certain manufacturers and suppliers may have a
competitive advantage over the Company in a given region. The Company believes
that its size and breadth of product lines provide it with certain advantages of
scale in both distribution and production relative to its competitors.

PATENTS AND TRADEMARKS

               The Company sells most products under the registered trade names
Dayton Superior(R), Dayton/Richmond(R), Symons(R), Richmond Screw Anchor(R),
Dur-O-Wal(R) and American Highway Technology(R), which the Company believes are
widely recognized in the construction industry and, therefore, are important to
its business. Although certain of the Company's products (and components
thereof) are protected by patents, the Company does not believe these patents
are material to its business. The Company has 120 trademarks and 90 patents.

EMPLOYEES

               As of December 31, 1998, the Company employed approximately 750
salaried and 1,330 hourly personnel, of whom approximately 1,000 of the hourly
personnel and six of the salaried personnel are represented by labor unions.
Employees at the Company's Miamisburg, Ohio; Parsons, Kansas; Des Plaines,
Illinois; New Braunfels, Texas; Tremont, Pennsylvania; St. Joseph, Missouri and
Aurora, Illinois manufacturing/distribution plant and its service/distribution
centers in Baltimore, Maryland; Atlanta, Georgia and Santa Fe Springs,
California are covered by collective bargaining agreements. In 1998, hourly


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employees at the Company's Kankakee, Illinois manufacturing/distribution plant
voted to be represented by a labor union, although a collective bargaining
agreement has not yet been executed. The collective bargaining agreement
covering the Des Plaines, Illinois facility expires in 1999. The Company
believes that it has good employee and labor relations.

SEASONALITY

               The Company's operations are seasonal in nature with
approximately 60% of sales historically occurring in the second and third
quarters. Working capital and borrowings fluctuate with sales volume.
Historically, more than 50% of cash flow from operations is generated in the
fourth quarter.

BACKLOG

               The Company typically ships most of its products, except paving
products and certain specialty forming systems, within one week after receipt of
an order and often within 24 hours. Certain product lines, including paving
products and specialty forming systems, may be shipped up to six months after
receipt of an order, depending on the needs of the customer. Accordingly, the
Company does not maintain significant backlog, and backlog as of any particular
date is not representative of actual sales for any succeeding period.

ITEM 2.        PROPERTIES.

               The Company's corporate headquarters are located in leased
facilities in Dayton, Ohio. The Company's principal facilities are located
throughout North America, as follows:

<TABLE>
<CAPTION>
                                                                                            LEASED/
                                                                                            -------    SIZE
           LOCATION                           USE                      PRODUCT LINE         OWNED    (SQ. FT.)
           --------                           ---                      ------------         -----    ---------
<S>                            <C>                               <C>                        <C>         <C>
Des Plaines, Illinois          Manufacturing/Distribution        Concrete Forming Systems   Owned       171,650
                               and Symons(R) Headquarters
Miamisburg, Ohio               Manufacturing/Distribution and      Concrete Accessories     Owned       126,000
                               Dayton/Richmond(R)Headquarters
Aurora, Illinois               Manufacturing/Distribution and        Masonry Products       Owned
                               Dur-O-Wal(R)Headquarters                                                  109,000
Kankakee, Illinois             Manufacturing/Distribution and        Paving Products        Leased      107,900
                               American Highway Technology(R)
                               Headquarters
Tremont, Pennsylvania          Manufacturing/Distribution          Concrete Accessories     Owned       102,650
Parsons, Kansas                Manufacturing/Distribution            Paving Products        Owned        98,250
New Braunfels, Texas           Manufacturing/Distribution        Concrete Forming Systems   Owned        89,600
Atlanta, Georgia               Service/Distribution                Concrete Accessories     Leased       74,090
Parker, Arizona                Manufacturing/Distribution          Concrete Accessories     Leased       60,000
Birmingham, Alabama            Service/Distribution                Concrete Accessories     Leased       55,000
Centralia, Illinois            Service/Distribution              Concrete Forming Systems   Owned        53,500
St. Joseph, Missouri           Manufacturing/Distribution          Concrete Accessories     Owned        53,342
Grand Prairie, Texas           Service/Distribution                Concrete Accessories     Leased       45,000
Seattle, Washington            Service/Distribution                Concrete Accessories     Leased       42,825
Santa Fe Springs, California   Service/Distribution                Concrete Accessories     Leased       40,000
</TABLE>



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<TABLE>

<S>                            <C>                                 <C>                      <C>          <C>   
Toronto, Ontario               Service/Distribution                Concrete Accessories     Leased       40,000
Oregon, Illinois               Service/Distribution                Concrete Accessories     Owned        39,000
Helena, Alabama                Manufacturing/Distribution            Paving Products        Leased       32,000
Folcroft, Pennsylvania         Service/Distribution                Concrete Accessories     Owned        32,000
Baltimore, Maryland            Service/Distribution                  Masonry Products       Owned        30,000
</TABLE>

               The Company believes that its facilities provide adequate
manufacturing and distribution capacity for its needs. The Company also believes
that all of the leases were entered into on market terms.

ITEM 3.        LEGAL PROCEEDINGS.

               Symons is currently a defendant involved in a civil suit brought
by EFCO Corp., a competitor of Symons in one portion of their business in 1996
in the United States District Court for the Southern District of Iowa (Case No.
4-96-CV-80552). EFCO Corp. alleged that Symons engaged in false advertising,
misappropriation of trade secrets, intentional interference with contractual
relations, and certain other activities. After a jury trial, preliminary damages
of approximately $14 million were awarded against Symons in January 1999. The
Company believes that there is no merit to these allegations, remains committed
to vigorously pursuing post-trial motions and appeals, and is seeking to vacate
the judgments in their entirety. The Company believes that, in the event the
judgments against it are not completely set aside, it has numerous substantial
grounds for a successful appeal and intends to vigorously pursue its appellate
rights. A successful appeal could result in judgment for Symons or a new trial.
Symons' liability, if any, cannot finally be determined until such time as all
rights of the parties have been exhausted or have expired by lapse of time. The
Company considers the outcome of this litigation to be not estimable.
Accordingly, the Company has not recorded any liability for the resolution of
this suit. In the event the Company is unsuccessful in its post-trial motions
and appeals, it may have a material adverse effect on its consolidated financial
position, results of operations, or cash flows.

               The Company is subject to regulation under various and changing
federal, state and local laws and regulations relating to the environment and to
employee safety and health. These environmental laws and regulations govern the
generation, storage, transportation, disposal and emission of various
substances. Permits are required for operation of the Company's business
(particularly air emission permits), and these permits are subject to renewal,
modification and, in certain circumstances, revocation. The Company believes
that it is in substantial compliance with such laws and permitting requirements.
The Company is also subject to regulation under various and changing federal,
state and local laws and regulations which allow regulatory authorities to
compel (or seek reimbursement for) cleanup of environmental contamination at its
own sites and at facilities where its waste is or has been disposed.

               The Company expects to incur on-going capital and operating costs
to maintain compliance with currently applicable environmental laws and
regulations. The Company does not expect such costs, in the aggregate, to be
material to its financial condition, results of operations or liquidity.


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ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

                Not applicable.


EXECUTIVE OFFICERS OF THE REGISTRANT

               The executive officers of the Company as of March 20, 1999 and
their ages, positions with the Company and their principal occupation during the
past five years (unless otherwise stated, positions with the Company) are as
follows:

Name                        Age       Position
----                        ---       --------

John A. Ciccarelli          59        President, Chief Executive Officer and 
                                      Director
Raymond E. Bartholomae      52        Vice President and General Manager, Symons
Mario J. Catani             66        Vice President, Engineering
Michael C. Deis, Sr.        48        Vice President and General Manager, 
                                      Dayton/Richmond
James W. Fennessy           55        Vice President and General Manager, 
                                      Superior Canada Ltd.
Mark K. Kaler               41        Vice President and General Manager, 
                                      American Highway Technology
Alan F. McIlroy             48        Vice President and Chief Financial Officer
John R. Paine, Jr.          56        Vice President, Sales and Marketing, 
                                      Dayton/Richmond
Thomas W. Roehrig           33        Corporate Controller
John M. Rutherford          38        Treasure and Assistant Secretary
James C. Stewart            51        Vice President, Corporate Development


               Mr. Ciccarelli has been President of the Company since 1989 and
has been Chief Executive Officer and a Director of the Company since 1994.

               Mr. Bartholomae has been Vice President and General Manager,
Symons, since February 1998, and was Executive Vice President and General
Manager of Symons from 1986 to February 1998. Symons was acquired by the Company
in September 1997.

               Mr. Catani has been Vice President, Engineering since May 1997,
and was President of Dur-O-Wal from 1984 to May 1997.

               Mr. Deis has been Vice President and General Manager,
Dayton/Richmond since February 1998. From 1987 to February 1998, Mr. Deis was
the Company's Vice President, Eastern Division of Dayton/Richmond (formerly,
Concrete Accessories).

               Mr. Fennessy has been Vice President and General Manager, Dayton
Superior Canada, Ltd. since 1988.


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               Mr. Kaler has been Vice President and General Manager, American
Highway Technology since April 1996. From 1990 to April 1996, Mr. Kaler was Vice
President, Engineering and Product Manager, Paving Division.

               Mr. McIlroy has been Vice President and Chief Financial Officer
since July 1997. From January 1994 until July 1997, Mr. McIlroy was President of
The Greenock Group, a private operational investment company.

               Mr. Paine has been Vice President, Sales and Marketing of
Dayton/Richmond (formerly, Concrete Accessories) since 1984.

               Mr. Roehrig has been Corporate Controller of the Company since
April 1998. From 1987 until March 1998, Mr. Roehrig was employed by Arthur
Andersen LLP, an international public accounting firm, most recently as an
Experienced Manager in the Assurance and Business Advisory division.

               Mr. Rutherford has been Treasurer and Assistant Secretary of the
Company since February 1998. From January 1993 until January 1998, Mr.
Rutherford was Director of Treasury and Risk Management for Gibson Greetings,
Inc., a greeting card manufacturer.

               Mr. Stewart has been Vice President, Corporate Development of the
Company since February 1998. From 1984 to February 1998, Mr. Stewart was the
Company's Vice President, Western Division of Dayton/Richmond (formerly Concrete
Accessories).






                                       12
<PAGE>   13


PART II

ITEM 5.        MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER 
               MATTERS.

               The Company's Class A Common Shares (which is the only class of
shares outstanding as of February 17, 1999) are traded on the New York Stock
Exchange under the symbol "DSD". The prices presented in the following table are
the high and low sales prices for the Class A Common Shares for the periods
presented as reported by the New York Stock Exchange.

<TABLE>
<CAPTION>
                                               High                    Low
                                               ----                    ---
<S>                                          <C>                     <C>    
                1998
                1st  Quarter                 $20.375                 $15.875
                2nd Quarter                   22.125                  16.500
                3rd Quarter                   21.375                  16.625
                4th Quarter                   20.875                  14.375

                                               High                    Low
                                               ----                    ---
                1997
                1st Quarter                  $13.500                 $11.250
                2nd Quarter                   13.250                   9.750
                3rd Quarter                   19.438                  12.500
                4th Quarter                   19.000                  14.813
</TABLE>

               As of March 18, 1999, the Company had 58 shareholders of record.
Based on requests from brokers and other nominees, the Company estimates there
are 950 additional beneficial owners of its shares.

               The Company has paid no dividends on its Common Shares. The
Company currently intends to retain its future earnings, if any, to fund the
development and growth of its business and, therefore, does not anticipate
declaring or paying cash dividends on the common shares in the near term. The
decision whether to apply legally available funds to the payment of dividends on
common shares will be made by the Board of Directors of the Company from time to
time in the exercise of its business judgment, taking into account, among other
things, the Company's results of operations and financial condition, any then
existing or proposed commitments for the use by the Company of available funds
and the Company's obligations with respect to any then outstanding class or
series of its preferred shares.

               The Company is restricted by the terms of its credit agreements
from paying cash dividends on the Common Shares and may in the future enter into
loan or other agreements or issue debt securities or preferred shares that
restrict the payment of cash dividends on the Common Shares. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."

               On November 24, 1998, the Company issued an additional 4,238 of
its Class A Common Shares to the former shareholders of Concrete Accessories,
Inc. ("CAI"), a privately-held corporation acquired by the Company in May 1998,
as a result of an adjustment to the 


                                       13
<PAGE>   14

aggregate number of Class A Common Shares to be issued in the acquisition, based
upon a closing audit of CAI. The additional Class A Common Shares were issued in
reliance upon the exemption from registration set forth in Section 4(2) of the
Securities Act of 1933, as amended, for transactions not involving a public
offering. The former shareholders of CAI have certain registration rights with
respect to such shares.


ITEM 6.        SELECTED FINANCIAL DATA.
               (All dollar amounts in thousands, except share data)

               The earnings statement data and the balance sheet data presented
below have been derived from the company's consolidated financial statements and
should be read in conjunction with Management's Discussion and Analysis of
Financial Condition and Results of Operations and the Consolidated Financial
Statements and Notes thereto, included elsewhere herein.

<TABLE>
<CAPTION>
                                                                Year Ended December 31,
                                      -----------------------------------------------------------------------------
                                          1994            1995            1996            1997            1998
                                      -------------    -----------    -------------    ------------    ------------
<S>                                     <C>              <C>           <C>              <C>             <C>     
EARNINGS STATEMENT DATA:
Net sales                               $82,341          $92,802       $124,486         $167,412        $282,849
Cost of sales                            58,011           63,990         86,021          110,528         174,423
                                      -------------    -----------    -------------    ------------    ------------
Gross profit                             24,330           28,812         38,465           56,884         108,426
Selling, general, and
  administrative expenses                16,722           18,698         23,637           37,277          76,392
Amortization of goodwill and
  intangibles                             1,305            1,491          1,749            1,885           2,213
                                      -------------    -----------    -------------    ------------    ------------
Income from operations                    6,303            8,623         13,079           17,722          29,821
Interest expense, net                     6,017            4,231          4,829            5,556          11,703
Other expense (income), net                 873               (3)            96              (64)           (202)
Provision for income taxes(2)                95              690          3,538            5,277           8,244
                                      -------------    -----------    -------------    ------------    ------------
Income (loss) before extraordinary
  item                                     (682)           3,705          4,616            6,953          10,076
Extraordinary item, net of tax           31,354(1)             -         (2,314)(3)            -               -
                                      -------------    -----------    -------------    ------------    ------------
Net income                              $30,672           $3,705         $2,302           $6,953         $10,076
                                      =============    ===========    =============    ============    ============
Net income available to common
  shareholders                          $30,175              $71         $2,302           $6,953         $10,076
                                      =============    ===========    =============    ============    ============
Basic income (loss) per share
  before extraordinary item             $ (0.67)          $ 0.02          $1.02            $1.22           $1.72
                                                           
Basic net income per share              $ 17.08           $ 0.02          $0.51            $1.22           $1.72
                                                           
Basic weighted average common
  shares  outstanding(4)              1,766,700        2,990,847      4,547,527        5,703,601       5,867,338
Diluted income (loss) per share
  before extraordinary item             $ (0.58)          $ 0.02          $0.94            $1.17           $1.65
                                         
Diluted net income per share            $ 14.93           $ 0.02          $0.47            $1.17           $1.65
                                                         
Diluted weighted average common and
  common share equivalents
  outstanding(4)                      2,020,717        3,558,908      4,925,464        5,933,244       6,098,205
</TABLE>

<TABLE>
<CAPTION>
                                                                   As of December 31,
                                      -----------------------------------------------------------------------------
<S>                                     <C>             <C>            <C>              <C>             <C>     
BALANCE SHEET:
Total assets                            $72,371         $103,860       $107,835         $226,930        $253,620
Long-term debt (including current        24,448           53,012         34,769          120,236         118,205
  portion)
Shareholders' equity                     27,674           27,485         52,872           60,529          74,588
</TABLE>


                                       14
<PAGE>   15

 (1)   In December 1992, the Company defaulted on certain financial covenants in
       its senior debt and was unable to make payments of principal and interest
       as they came due. From December 1992 to May 1994, the Company accrued
       additional penalty interest on its senior debt. In May 1994, the Company
       reached an agreement with its lenders to restructure its debt, resulting
       in an extraordinary gain of $31,354, net of an income tax effect of $92.

 (2)   In 1994, the provision for income taxes related to alternative minimum
       taxes. In 1995, the provision for income taxes was reduced to reflect the
       utilization of net operating losses.

(3)     During June 1996, the Company prepaid its $40,000 unsecured senior
        promissory notes. In conjunction therewith, the Company paid a
        prepayment premium of $2,400 and expensed unamortized financing costs
        and debt discount of $795 and $538, respectively. The Company recorded
        an extraordinary loss of $2,314, net of an income tax effect of $1,419.
        The Company funded this repayment with $22,358 in proceeds from its
        public stock offering and $20,042 from its credit facility.

 (4)    Basic net income per share is computed by dividing net income available
        to common shareholders by the weighted average number of common shares
        outstanding during the year. Diluted net income per share is computed by
        dividing net income available to common shareholders by the weighted
        average number of common and common share equivalents outstanding during
        the year. Common share equivalents include the number of shares issuable
        upon the exercise of outstanding options and warrants, less the shares
        that could be purchased with the proceeds from the exercise of the
        options and warrants, based on the Company's average trading price for
        1998, 1997, and 1996 and the initial public offering price of $13.00 per
        share for 1995 and 1994. For the purposes of calculating net income
        (loss) per common and equivalent share, equivalent shares issued less
        than 12 months prior to the initial public offering are included for all
        periods presented. Common equivalent shares issued more than 12 months
        prior to the Offering are excluded in periods with a net loss available
        to common shareholders. See Note 3(h) to the consolidated financial
        statements of the Company.



                                       15
<PAGE>   16


ITEM 7.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
               AND RESULTS OF OPERATIONS. 

OVERVIEW

               Dayton Superior's record net sales of $282.8 million in 1998 were
68.9% higher than 1997 and 127.1% higher than 1996. The Company's net sales for
its four major product categories during the last three years were:

<TABLE>
<CAPTION>
DOLLARS IN MILLIONS                         1998                 1997                 1996
-------------------                         ----                 ----                 ----

<S>                                        <C>                 <C>                  <C>    
Concrete Accessories                       $131.4              $  92.2              $  76.7
Concrete Forming Systems                    104.7                 21.1                  -
Paving Products                              31.0                 29.2                 21.9
Masonry Products                             24.3                 24.9                 25.9
Intersegment Eliminations                    (8.6)                  -                   -
                                           ------               ------               ------

Net sales                                  $282.8               $167.4               $124.5
                                           ======               ======               ======
</TABLE>


               The acquisition of Symons, a leading manufacturer of
prefabricated concrete forming systems, on September 29, 1997 contributed
approximately 80% of the net sales growth in 1998 from 1997 and approximately
60% of the net sales growth in 1997 from 1996.

               Income before income taxes and extraordinary item was a record
$18.3 million in 1998 versus $12.2 million in 1997 and $8.2 million in 1996. In
June 1996, after the completion of its initial public offering, the Company
prepaid its $40.0 million of unsecured senior promissory notes and recorded an
extraordinary loss on the extinguishment of debt of $2.3 million, net of income
tax effect.

               Net income in 1998 was $10.1 million ($1.65 per diluted share and
$1.72 per basic share) compared to $7.0 million ($1.17 per diluted share and
$1.22 per basic share) in 1997 and $2.3 million ($0.47 per diluted share and
$0.51 basic share) in 1996. Excluding the extraordinary item, 1996 net income
was $4.6 million ($0.94 per diluted share and $1.02 per basic share).

               In June 1998, the Transportation Equity Act for the 21st Century
("TEA-21") was enacted. TEA-21 provides, on average, a 40% increase in federal
highway spending over the next six years. The Company's paving products segment
is expected to benefit from TEA-21 beginning in the second half of 1999. The
Company believes that TEA-21 had no significant impact on its 1998 operations.

IMPLEMENTATION OF BUSINESS STRATEGY

               On September 29, 1997, the Company purchased the stock of Symons
Corporation ("Symons"). Symons was a private company, which owned two
businesses. The first business, the Symons division, is a leading manufacturer
of prefabricated concrete forming systems. The second business, Richmond Screw
Anchor, manufactured and sold concrete accessories. The addition of these two
businesses provides the Company with both


                                       16
<PAGE>   17

a complementary fourth business platform, concrete forming systems, and
expansion in the concrete accessories market. The Symons division is being
operated on a stand alone basis while the Richmond Screw Anchor business has
been blended with the Company's existing concrete accessories division. The
Company paid $34.0 million (plus acquisition costs of $3.3 million) for the
Common Stock of Symons, of which $32.3 million was paid in cash and $5.0 million
was paid by delivery of a seven year unsecured note. The Company also assumed
$47.7 million of long-term debt. The purchase agreement between the Company and
the former stockholders of Symons (the "Former Stockholders") relating to the
Acquisition (the "Purchase Agreement") provides for an adjustment to the
purchase price under certain circumstances. The Company has advised the Former
Stockholders that it believes it is entitled to a purchase price adjustment in
its favor, and the Former Stockholders similarly advised the Company that they
believe they are entitled to a purchase price adjustment in their favor. The
Purchase Agreement provides that, if the Company and the Former Stockholders are
unable to resolve these differences, the dispute will be referred to a mutually
satisfactory accounting firm, which is expected to resolve such differences, in
accordance with the terms of the Purchase Agreement. On June 12, 1998, the
Former Stockholders filed a lawsuit in Delaware Chancery Court ("the
Court") seeking a determination with respect to a limited number of issues
involved in the dispute, which the Company believes can be resolved only through
arbitration. On October 28, 1998, the Court granted the Company's motion to
dismiss with respect to certain of these issues. On December 28, 1998, the Court
stayed the proceeding with respect to the issues as to which it had retained
jurisdiction, pending the outcome of arbitration commenced by the parties with
respect to the purchase price adjustment. Either party may seek to reopen the
proceedings following the arbitration. The Company intends to vigorously pursue
its rights under the Purchase Agreement.

               In January 1999, the Company purchased substantially all of the
assets and assumed certain of the liabilities of Cempro, Inc., ("Cempro") for
$5.4 million in cash. Cempro was a manufacturer of construction chemicals and is
being operated as a part of the Company's construction chemicals business, which
was established in early 1999.

               In June 1998, the Company purchased substantially all of the
assets of Secure, Inc., ("Secure") a subsidiary of The Lofland Company, for $0.6
million in cash. Secure was a manufacturer of construction chemicals whose
products are sold primarily through the Company's paving products business.

               In May 1998, the Company purchased the stock of CAI for $6.7
million, payable in cash of $0.4 million, delivery of 222,496 Class A Common
Shares totaling $4.1 million, and assumed long-term debt of $2.2 million. CAI
was a distributor of concrete forming systems.

               In May 1998, the Company purchased the assets of the two
Northwoods branches of Concrete Forming, Inc. for $0.8 million in cash. The
Northwoods branches were distributors of concrete forming systems.

               In February 1997, the Company acquired the principal assets of
Ironco Manufacturing Co., Inc. and Birmingham Bar Coating, Inc. ("Ironco") for
$1.5 million, of 


                                       17
<PAGE>   18

which $1.1 million was cash and the remainder was paid by delivery of 26,254
shares of Class A Common Shares. Ironco was a manufacturer of paving products.

               In June 1996, the Company completed an initial public offering of
2,030,950 shares of Class A Common Shares and received proceeds of $23.0
million, net of expenses. The proceeds from the offering were used, in
combination with new borrowings, to prepay its $40.0 million of unsecured senior
promissory notes.

               In April 1996, the Company purchased certain assets of Steel
Structures, Inc. ("SSI") for cash of $5.6 million. SSI was a manufacturer of
paving products.


RESULTS OF OPERATIONS

               The following table summarizes the Company's results of
operations as a percentage of net sales for the years 1996 through 1998 ending
December 31.

<TABLE>
<CAPTION>
                                                                      1998            1997         1996
                                                                  -------------     ---------    -------------
<S>                                                                   <C>              <C>         <C>  
Net sales                                                             100.0            100.0       100.0
Cost of goods sold                                                     61.7             66.0        69.1
                                                                  -------------     ---------    -------------
Gross profit                                                           38.3             34.0        30.9
Selling, general and administrative expenses                           27.0             22.3        19.0
Amortization of goodwill and intangibles                                0.8              1.1         1.4
                                                                  -------------     ---------    -------------
Income from operations                                                 10.5             10.6        10.5
Interest expense, net                                                   4.1              3.3         3.9
Other expense (income), net                                            (0.1)             -           -
                                                                  -------------     ---------    -------------
Income before income taxes and extraordinary item                       6.5              7.3         6.6
Provision for income taxes                                              2.9              3.1         2.9
                                                                  -------------     ---------    -------------
Income before extraordinary item                                        3.6              4.2         3.7
Extraordinary item, net of tax                                          -                -          (1.9)(1)
                                                                  -------------     ---------    -------------
Net income                                                              3.6              4.2         1.8
                                                                  =============     =========    =============
</TABLE>
------------------------------

(1)  In June 1996, the Company extinguished debt creating an extraordinary loss
     of $2.3 million, net of tax effects.


COMPARISON OF YEARS ENDED DECEMBER 31, 1998 AND 1997

                  Net Sales - The 1998 net sales reached a record $282.8
million, a 68.9% increase from $167.4 million in 1997 and a 12.1% increase from
pro forma 1997 sales of $252.3 million as if Symons had been acquired on January
1, 1997. Concrete accessories net sales increased by 42.5% from $92.2 million in
1997 to $131.4 million in 1998, due to a full year's net sales resulting from
the Richmond Screw Anchor division of Symons. Concrete accessories net sales
increased 13.0% from pro forma 1997 net sales of $116.3 million due to strong
heavy construction activity in the U.S. and new product sales. Concrete forming
systems net sales increased from $21.1 million in 1997 to $104.7 million in 1998
due to a full year's net sales resulting from the acquisition of Symons.
Concrete forming systems net sales increased 20.0% from 1997 pro forma net sales
of $87.3 million due to the net sales of CAI and 


                                       18
<PAGE>   19

Northwoods after their acquisitions, as well as strong heavy construction
activity in the U.S. Net sales of paving products increased by 6.2% to $31.0
million in 1998 from $29.2 million in 1997 due to increased market gains. Net
sales of masonry accessories were $24.3 million for 1998 versus $24.9 million in
1997, due to a high level of competition in the hot dipped and mill galvanized
masonry wall reinforcement product markets, which was somewhat offset by a shift
to higher margin, lower volume engineered products.

                  Gross Profit - Gross profit for 1998 was $108.4 million, a
90.5% increase over $56.9 million for 1997. As a percent of net sales, gross
margin was 38.3% in 1998 compared to 34.0% in 1997. The gross margin increased
primarily due to the inclusion of the Symons division for a full year as
concrete forming systems have higher gross margins, primarily due to rental
revenues, than the Company's other product lines. The 1998 gross margin of 38.3%
also increased from the 1997 pro forma gross margin of 36.1% due to better
product mix with higher net sales of concrete forming systems and less net sales
of paving products and masonry products as a percent of consolidated net sales,
as well as cost savings in the concrete accessories business.

                  Operating Expenses - Selling, general, and administrative
expenses, including the amortization of goodwill and intangibles ("SG&A
expenses"), increased from $39.2 million in 1997 to $78.6 million in 1998. The
increase is due to a full year of expenses resulting from the acquisition of
Symons. SG&A expenses were up as a percent of sales from 23.4% in 1997 to 27.8%
in 1998, due to concrete forming systems having a higher percentage of SG&A
expenses to net sales than the Company's other operating segments. This reflects
the additional distribution and maintenance costs associated with the management
of the rental equipment fleet. SG&A expenses as a percent of sales also
increased from pro forma 1997 of 26.7%, primarily due to product mix of higher
concrete forming systems, including CAI, and less paving products and masonry
products as a percent of total net sales.

                  Interest and Other Expenses - Interest expense increased to
$11.7 million in 1998 from $5.6 million in 1997 due primarily to the full year
effect of higher debt resulting from the Symons acquisition, and to a lesser
extent, higher capital expenditures.

                  Income Before Income Taxes - Income before income taxes in
1998 increased 50.0% to a record $18.3 million from $12.2 million in 1997.
Concrete accessories income before income taxes of $19.4 million in 1998
increased 41.6% from $13.7 million due primarily to the increase in concrete
accessories net sales. Concrete forming systems income before income taxes of
$6.1 million in 1998 increased from $0.4 million in 1997 due primarily to the
full year effect of the acquisition of Symons. Income before income taxes from
paving products increased to $1.7 million, or 5.5% of net sales, in 1998 from
$1.4 million, or 4.8% of net sales in 1997. Income before income taxes from
masonry products was $0.5 million in 1998 compared to virtually breakeven in
1997, despite the decrease in net sales, due to a shift to higher margin, lower
volume engineered products. Corporate expenses increased to $5.2 million from
$3.2 million due to strengthening the finance, treasury, tax, purchasing,
logistics, and corporate development functions. Elimination of profit on
intersegment sales was $4.2 million in 1998.

               Net Income - The effective tax rate in 1998 was 45.0%, or $8.2
million, compared to a rate of 43.1%, or $5.3 million, in 1997. Nondeductible
goodwill amortization 


                                       19
<PAGE>   20

and state and local taxes caused the Company's effective tax rate to exceed
federal statutory levels.

               Net income increased $3.2 million to $10.1 million in 1998 from
$6.9 million in 1997 due to the factors described above.

COMPARISON OF YEARS ENDED DECEMBER 31, 1997 AND 1996

               Net Sales - The 1997 net sales reached a record $167.4 million, a
34.5% increase from $124.5 million in 1996. Concrete accessories net sales
increased by 20.2% from $76.7 million in 1996 to $92.2 million in 1997, due to
the addition of the Richmond Screw Anchor division of Symons for three months,
which contributed 38.0% of the increase. Additionally, strong heavy construction
activity in the U.S. and new product sales of concrete accessories also
contributed to the increased net sales. Net sales of paving products increased
by 33.3% to $29.2 million in 1997 from $21.9 million in 1996 due to the
acquisition of Ironco, a full year's net sales resulting from the acquisition of
SSI, and an increased presence in the market place. Net sales of masonry
accessories were $24.9 million for 1997 versus $25.9 million in 1996.
Competition continued at a high level in the hot dipped and mill galvanized
masonry wall reinforcement product markets. Concrete forming systems net sales
were $21.1 million for the fourth quarter as a result of the acquisition of
Symons.

               Gross Profit - Gross profit for 1997 was $56.9 million, a 47.9%
increase over $38.5 million for 1996. As a percent of net sales, gross margin
was 34.0% in 1997 compared to 30.9% in 1996. The gross margin increased
primarily as a result of the inclusion of the sales of Symons in the fourth
quarter, as concrete forming systems have higher gross margins, primarily due to
rental revenues, than the Company's other product lines. The increase in gross
profit dollars is attributable to the fourth quarter contribution of Symons,
and, to a lesser extent, improved selling prices and a shift in sales mix in
favor of higher margin products in the Company's concrete accessories business.
Continued investments in fixed assets also added to margin in 1997 by allowing
the Company to reduce its manufacturing costs. The Company also continued its
focus on cost improvement programs.

               Operating Expenses - SG&A expenses increased $13.7 million, or
57.7%, from $23.6 million in 1996 to $37.3 million in 1997. Approximately 70% of
the increase resulted from the acquisition of Symons. SG&A expenses also were up
due to the addition of Ironco, management personnel relocations, and integration
costs from the Symons acquisition. SG&A expenses were up as a percent of sales
from 19.0% in 1996 to 22.3% in 1997, due to concrete forming systems having a
higher percentage of SG&A expenses to net sales than the Company's existing
businesses.

               Interest and Other Expenses - Interest expense increased 15.1% to
$5.6 million in 1997 from $4.8 million in 1996 due to higher debt resulting from
the Symons acquisition. Additionally, deferred financing costs of $0.3 million
related to the previous credit facility were expensed. The lower average debt
outstanding in the first three quarters of 1997 and the lower interest rates
obtained in the June 1996 debt restructuring were offset by the increased
financing for the Symons acquisition.


                                       20
<PAGE>   21

                  Income Before Income Taxes - Income before income taxes in
1997 increased 48.8% to $12.2 million from $8.2 million in 1996. Concrete
accessories income before income taxes of $13.7 million in 1997 increased 44.2%
from $9.5 million due primarily to the increase in concrete accessories net
sales. Concrete forming systems income before income taxes was $0.4 million for
the three months following the acquisition of Symons. Income before income taxes
in 1997 from paving products increased to $1.4 million, or 4.8% of net sales,
from $0.9 million, or 4.1% of net sales, in 1996. Income before income taxes
from masonry products was virtually breakeven in 1997 compared to income before
income taxes of $0.6 million in 1996 due to the decrease in net sales. Corporate
expenses increased to $3.2 million from $2.8 million due to the hiring of an
additional financial officer in December 1996 and the full year effect of
directors and officers insurance and other expenses related to being a public
company.

               Net Income - The effective tax rate in 1997 was 43.1%, or $5.3
million, compared to a rate of 43.4%, or $3.5 million, in 1996. Nondeductible
goodwill amortization and state and local taxes caused the Company's effective
tax rate to exceed federal statutory levels.

               As described in Note 4 to the consolidated financial statements,
the Company prepaid certain indebtedness in June 1996 that resulted in an
extraordinary charge of $2.3 million.


LIQUIDITY AND CAPITAL RESOURCES

               The Company's key statistics for measuring liquidity and capital
resources are net cash provided by operating activities, capital expenditures,
debt to total capitalization ratio, amounts available under its Revolving Credit
Facility, and cash gap. The Company defines cash gap as accounts receivable days
outstanding plus inventory future days cost of sales less accounts payable days
to pay.

               The Company's capital requirements relate primarily to capital
expenditures, debt service and the cost of acquisitions. Historically, the
Company's primary sources of financing have been cash generated from operations,
borrowings under its revolving line of credit and the issuance of long-term debt
and equity.

               Net cash provided by operating activities for 1998 was $19.6
million. Sources of operating cash flow for 1998 included $10.1 million in net
income and $13.1 million from non-cash charges for depreciation and amortization
and was reduced by $8.2 million in gains on sales of rental equipment and
property, plant, and equipment. Working capital changes, net of acquisitions,
generated $2.9 million. Net cash generated by operations was used for capital
expenditures, to fund strategic acquisitions of $1.8 million as described in
Note 2 of the consolidated financial statements, and to repay long-term debt of
$4.3 million, including long-term debt assumed in acquisitions of $2.2 million.
Capital expenditures included net additions to the rental equipment fleet of
$6.8 million to support the growth in concrete forming systems and, to a lesser
extent, concrete accessories, as well as property, plant, and equipment
additions of $7.2 million as the Company continues to focus on cost improvement


                                       21
<PAGE>   22

programs. Proceeds from sales of property, plant, and equipment of $1.1 million
related to the sale of duplicate facilities as a result of the acquisition of
Symons.

               At December 31, 1998, working capital was $44.7 million, compared
to $45.4 million at December 31, 1997. Despite the 12.1% pro forma growth in
sales volume, working capital decreased as the Company continues to manage its
working capital through its cash gap program.

               At December 31, 1998, $40.0 million of the $40.0 million
Revolving Credit Facility was available, of which $13.0 million of borrowings
were outstanding. The Term Loan had an outstanding balance at December 31, 1998
of $100.0 million. Other long-term debt consisted of $5.0 million to one of the
Former Stockholders and $0.2 million to the City of Parsons, Kansas. At December
31, 1998, the Company had $118.2 million of long-term debt outstanding, of which
$32 thousand was current. The Company's debt to total capitalization ratio
decreased from 66.5% in 1997 to 61.3% in 1998 primarily due to increased equity
from net income.

               To manage its interest rate risk, the Company entered into two
interest rate swap agreements on a total of $50.0 million of long-term debt that
fixed the LIBOR-based component of the interest rate formula. The swaps have a
fixed ninety-day LIBOR component of 6.30% and 6.33%, and expire on November 1,
2000. The ninety-day LIBOR as of December 31, 1998 was 5.07%. All fluctuations
in rates resulting from the swaps are accounted for as interest expense. These
swaps are required by the Company's Credit Agreement and are contracts to
exchange floating rate for fixed rate interest payments over three years without
the exchange of underlying amounts. The estimated fair value of the interest
rate swap agreements is a liability of $1.2 million.

               Symons is currently a defendant involved in a civil suit brought
by EFCO Corp., a competitor of Symons in one portion of their business. EFCO
Corp. alleged that Symons engaged in false advertising, misappropriation of
trade secrets, intentional interference with contractual relations, and certain
other activities. After a jury trial, preliminary damages of approximately $14
million were awarded against Symons in January 1999. The Company believes that
there is no merit to these allegations, remains committed to vigorously pursuing
post-trial motions and appeals, and is seeking to vacate the judgments in their
entirety. The Company believes that, in the event the judgments against it are
not completely set aside, it has numerous substantial grounds for a successful
appeal and intends to vigorously pursue its appellate rights. A successful
appeal could result in judgment for Symons or a new trial. Symons' liability, if
any, cannot finally be determined until such time as all rights of the parties
have been exhausted or have expired by lapse of time. The Company considers the
outcome of this litigation to be not estimable. Accordingly, the Company has not
recorded any liability for the resolution of this suit. In the event the Company
is unsuccessful in its post-trial motions and appeals, it may have a material
adverse effect on its consolidated financial position, results of operations, or
cash flows.

               The Company believes its liquidity, capital resources and cash
flows from operations are sufficient to fund planned capital expenditures,
working capital requirements and debt service in the absence of additional
acquisitions.


                                       22
<PAGE>   23

               The Company intends to fund future acquisitions with cash,
securities or a combination of cash and securities. To the extent the Company
uses cash for all or part of any such acquisitions, it expects to raise such
cash primarily from cash generated from operations, borrowings under the Credit
Facility or, if feasible and attractive, issuances of long-term debt or
additional Class A Common Shares.

SEASONALITY

                  The Company's operations are seasonal in nature, with
approximately 60% of sales historically occurring in the second and third
quarters. Working capital and borrowings fluctuate with sales volume.
Historically, more than 50% of cash flow from operations is generated in the
fourth quarter.

INFLATION

                  The Company does not believe inflation had a significant
impact on its operations over the past three years. In the past, the Company has
been able to pass along all or a portion of the effects of steel price
increases. There can be no assurance the Company will be able to continue to
pass on the cost of such increases in the future.

YEAR 2000

                  Certain software and hardware systems are date sensitive.
Older date sensitive systems often use a two digit dating convention ("00"
rather than "2000") that could result in system failure and disruption of
operations as the year 2000 approaches. This is referred to as the "Year 2000"
issue. The Year 2000 issue will impact the Company, its suppliers, customers and
other third parties that transact business with the Company.

                  The Company has a Year 2000 compliance team. This team is
reviewing substantially all hardware and software systems within the Company,
products sold by the Company, and significant suppliers and other third parties
that transact business with the Company. Projects have been established to
address all significant Year 2000 issues identified in this review. The Year
2000 team reports regularly to senior management on the progress of significant
Year 2000 projects. Senior management reports to the Board of Directors on the
Company's progress with Year 2000 projects.

                  The compliance review has involved testing of hardware and
software systems, including non-information technology systems such as
telephones and Computer Numeric Controlled machines. The Company has determined
that it needs to replace or modify some of its software and hardware systems.
The Company is replacing or upgrading most of the systems which have been
identified as having Year 2000 issues.

                  The Company believes it has no material exposure to
contingencies related to the Year 2000 issue for products sold as almost none of
the Company's products contain time sensitive hardware or software systems.

                  The Company has initiated communications with significant
suppliers, customers and other relevant third parties to identify and minimize
disruptions to the Company's operations and to assist in resolving Year 2000
issues. Particular attention has 


                                       23
<PAGE>   24

been given to those suppliers who may be the Company's only source for certain
products or components. However, there can be no certainty that the impacted
systems and products of other parties on which the Company relies will be Year
2000 compliant.

                  The Company's estimates of Year 2000 costs are based on
numerous assumptions; actual costs could be greater than estimates. Specific
factors that might cause such differences include, but are not limited to, the
continuing availability of personnel trained in this area and the Company's
ability to timely identify and correct all relevant software and hardware
systems and the success of third party vendors in addressing their own Year 2000
issues. To date, the Company has incurred approximately $680 thousand, of which
$650 thousand was capitalized and $30 thousand was expensed. These costs were to
replace existing hardware and third party software and professional fees for
external assistance. The estimated future cost for resolving Year 2000 issues is
approximately $240 thousand, of which $180 thousand is expected to be
capitalized and $60 thousand is expected to be expensed. These costs are to
replace or upgrade existing hardware and third party software, including
professional fees for external assistance.

                  The Company believes it is diligently addressing the Year 2000
issues and that it will satisfactorily resolve all significant Year 2000
problems. The Company successfully completed a test of its integrated systems in
the fourth quarter of 1998 and anticipates completing substantially all of its
Year 2000 projects by the end of the second quarter of 1999. In the event the
Company falls short of these milestones, additional internal resources will be
focused on completing these projects or implementing contingency plans.

                  The Company believes that its most reasonably likely worst
case scenario would be related to the lack of success of third party vendors of
addressing their Year 2000 issues, particularly suppliers who are the Company's
only source, such as local electricity providers. If a facility were to be
unable to manufacture products due to a lack of electricity, contingency plans
include the transfer of production orders to other facilities. The Company
believes the impact would not be significant due to the seasonal capacity that
exists in January.

RECENTLY ISSUED ACCOUNTING STANDARDS

                  In July 1997, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 130,
"Reporting Comprehensive Income". SFAS 130 establishes standards for reporting
and display of comprehensive income and its components in a full set of
financial statements. The objective of the Statement is to report a measure of
all changes in equity of an enterprise that result from transactions and other
economic events of the period other than transactions with owners
("comprehensive income"). Comprehensive income is the total of net income and
all other nonowner changes in equity. The Company has adopted SFAS 130.

                   In July 1997, the FASB issued SFAS No. 131, "Disclosures
About Segments of an Enterprise and Related Information." SFAS 131 introduces a
new model for segment reporting, called the "management approach." The
management approach is based on the way that the chief operating decision maker
organizes segments within a company for making operating decisions and assessing
performance. Reportable segments are based on 


                                       24
<PAGE>   25

products and services, geography, legal structure, management structure - any
manner in which management disaggregates a company. The management approach
replaces the notion of industry and geographic segments in current FASB
standards. The Company has adopted SFAS 131 for its 1998 annual report. See Note
9 to the consolidated financial statements.

                  In February 1998, the FASB issued SFAS No. 132 "Employers'
Disclosures about Pensions and Other Postretirement Benefits." SFAS 132 amends
the disclosures required for pensions and other postretirement benefits. The
Company has adopted SFAS No. 132; see Note 7 to the consolidated financial
statements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

FORWARD-LOOKING STATEMENTS

                  This annual report includes; and future filings by the Company
on Form 10-K, Form 10-Q, and Form 8-K and future oral and written statements by
the Company and its management may include, certain forward-looking statements,
including (without limitation) statements with respect to anticipated future
operating and financial performance, growth opportunities and growth rates,
acquisition and divestiture opportunities and other similar forecasts and
statements of expectation. Words such as "expects", "anticipates", "intends",
"plans", "believes", "seeks", "estimates" and "should", and variations of these
words and similar expressions, are intended to identify these forward-looking
statements. Forward-looking statements by the Company and its management are
based on estimates, projections, beliefs and assumptions of management and are
not guarantees of future performance. The Company disclaims any obligation to
update or revise any forward-looking statement based on the occurrence of future
events, the receipt of new information, or otherwise.

                  Actual future performance, outcomes and results may differ
materially from those expressed in forward-looking statements made by the
Company and its management as the result of a number of important factors.
Representative examples of these factors include (without limitation) the
cyclical nature of nonresidential building and infrastructure construction
activity, which can be affected by factors outside the Company's control, such
as the general economy, governmental expenditures and changes in banking and tax
laws; the Company's ability to successfully identify, finance, complete and
integrate acquisitions; the mix of products sold by the Company; the Company's
ability to successfully develop and introduce new products; increases in the
price of steel (the principal raw material in the Company's products) and the
Company's ability to pass along such price increases to its customers; and the
seasonality of the construction industry. In addition to these factors, actual
future performance, outcomes and results may differ materially because of other,
more general, factors including (without limitation) general industry and market
conditions and growth rates, domestic economic conditions, governmental and
public policy changes and the continued availability of financing in the
amounts, at the terms and on the conditions necessary to support the Company's
future business.


                                       25
<PAGE>   26

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As of December 31, 1998, the Company had financial instruments which were
sensitive to changes in interest rates. These financial instruments consist of a
$40.0 million Revolving Credit Facility, of which $13.0 million was outstanding;
a $100.0 million Term Loan; $5.2 million in other fixed-rate, long-term debt;
and variable-to-fixed interest rate $50.0 million of the Term Loan.

The Revolving Credit Facility terminates in 2002 and has several interest rate
options which re-price on a short-term basis. Accordingly, the fair value of the
Revolving Credit Facility approximates its $13.0 million face value. The
weighted average interest rate at December 31, 1998 was 7.3%.

The $100.0 million Term Loan is due in 2005. The Term Loan permits the Company
to choose from various interest rate options which re-price on a short-term
basis.  Accordingly, the fair value of the Revolving Credit Facility
approximates its face value. The Term Loan has a weighted average interest rate
of 8.15% at December 31, 1998.

Other long-term debt consists of a.) a $5.0 million, 10.5% note payable due in
2004 with an estimated fair value of $5.8 million and b.) a $0.2 million, 7.0%
loan due in installments of $32 thousand per year with an estimated fair value
of $0.2 million.

   The Company has two interest rate swap agreements on a total of $50.0 million
that fixed the LIBOR-based component of the interest rate formula as required
by the Company's Credit Agreement. The swaps have a fixed ninety-day LIBOR   
component of 6.30% and 6.33%, and expire on November 1, 2000. The ninety-day
LIBOR as of December 31, 1998 was 5.07%. These swaps are contracts to exchange
floating rate for fixed rate interest payments without the exchange of
underlying amounts. The estimated fair value of the interest rate swaps is a
liability of $1.2 million.

   Management does not believe there will be any significant changes in interest
rates in the near future. However, no assurances can be given that economic
conditions or interest rates will remain stable for any particular period.

   in the ordinary course of its business, the Company also is exposed to
price changes in raw materials (particularly steel rod) and products purchased
for resale. The prices of these items can change significantly due to changes
in the markets in which the Company's suppliers operate. The Company generally
does not use finanical instruments to manage its exposure to changes in
commodity prices.





                                       26
<PAGE>   27


ITEM 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                    Report Of Independent Public Accountants



To Dayton Superior Corporation:

We have audited the accompanying consolidated balance sheets of Dayton Superior
Corporation (an Ohio corporation) and Subsidiaries as of December 31, 1998 and
1997, and the related consolidated statements of income, shareholders' equity,
cash flows, and comprehensive income for each of the three years in the period
ended December 31, 1998. These financial statements and the schedule referred to
below are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and schedule based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dayton Superior Corporation and
Subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed under Part IV, Item
14(a)(2) is the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states, in all material respects, the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.


                                                             ARTHUR ANDERSEN LLP



Dayton, Ohio
January 26, 1999    (except with respect to the matter discussed in Note 12, as 
                    to which the date is February 17, 1999)




                                       27
<PAGE>   28


                  Dayton Superior Corporation And Subsidiaries
                           Consolidated Balance Sheets
                                As of December 31
           (Amounts in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
ASSETS (Note 5)                                                                  1998            1997
                                                                              ---------       ---------
<S>                                                                           <C>             <C>    
Current assets
   Cash                                                                       $     560       $    --
   Accounts receivable, net of allowances for doubtful accounts and
     sales returns and allowances of $4,432 and $5,015                           42,996          35,054
   Inventories (Note 3)                                                          36,058          32,873
   Prepaid expenses and other current assets                                      4,396           3,047
   Prepaid income taxes                                                             828           2,087
   Future income tax benefits (Notes 3 and 8)                                     3,521           3,657
                                                                              ---------       ---------
       Total current assets                                                      88,359          76,718
                                                                              ---------       ---------
Rental equipment, net (Note 3)                                                   52,586          38,327
                                                                              ---------       ---------
Property, plant and equipment (Note 3)
   Land and improvements                                                          5,481           5,577
   Building and improvements                                                     20,030          19,330
   Machinery and equipment                                                       38,339          33,156
                                                                              ---------       ---------
                                                                                 63,850          58,063
                                                                              ---------       ---------
   Less accumulated depreciation                                                (22,069)        (16,711)
                                                                              ---------       ---------
       Net property, plant and equipment                                         41,781          41,352
                                                                              ---------       ---------
Goodwill and intangible assets, net of accumulated amortization (Note 3)         70,130          68,590
Other assets                                                                        764           1,943
                                                                              ---------       ---------
                  Total assets                                                $ 253,620       $ 226,930
                                                                              =========       =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
   Current portion of long-term debt (Note 5)                                 $      32       $      32
   Accounts payable                                                              20,749          15,753
   Accrued compensation and benefits                                             12,443           7,480
   Other accrued liabilities                                                     10,408           8,088
                                                                              ---------       ---------
       Total current liabilities                                                 43,632          31,353
Long-term debt (Note 5)                                                         118,173         120,204
Deferred income taxes (Notes 3 and 8)                                            11,544           8,079
Other long-term liabilities (Note 7)                                              5,683           6,765
                                                                              ---------       ---------
       Total liabilities                                                        179,032         166,401
                                                                              ---------       ---------
Shareholders' equity (Note 6)
   Class A common shares; no par value; 20,539,500 shares authorized;
     5,200,472 and 4,261,806 shares issued and 5,193,174 and 4,261,806
     shares outstanding; 1 vote per share                                        42,316          33,386
   Class B common shares; no par value; 757,569 and 1,466,350 shares
     authorized, issued, and outstanding; 10 votes per share                      5,037           9,749
   Class A treasury shares, at cost, 7,298 and 0 shares                            (145)            -
   Cumulative foreign currency translation adjustment                              (266)           (191)
   Excess pension liability                                                         (15)            -
   Retained earnings                                                             27,661          17,585
                                                                              ---------       ---------
       Total shareholders' equity                                                74,588          60,529
                                                                              ---------       ---------
           Total liabilities and shareholders' equity                         $ 253,620       $ 226,930
                                                                              =========       =========
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these consolidated balance sheets.


                                       28
<PAGE>   29

                  Dayton Superior Corporation and Subsidiaries
                        Consolidated Statements of Income
                             Years Ended December 31

           (Amounts in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                                         1998              1997             1996
                                                                      ---------         ---------         ---------

<S>             <C>                                                    <C>               <C>               <C>     
Net sales (Note 3)                                                     $282,849          $167,412          $124,486
Cost of sales                                                           174,423           110,528            86,021
                                                                      ---------         ---------         ---------
   Gross profit                                                         108,426            56,884            38,465
Selling, general and administrative expenses                             76,392            37,277            23,637
Amortization of goodwill and intangibles                                  2,213             1,885             1,749
                                                                      ---------         ---------         ---------
   Income from operations                                                29,821            17,722            13,079
Other expenses
   Interest expense, net                                                 11,703             5,556             4,829
   Other expense (income), net                                             (202)              (64)               96
                                                                      ---------         ---------         ---------
   Income before income taxes and extraordinary item                     18,320            12,230             8,154
Provision for income taxes (Note 8)                                       8,244             5,277             3,538
                                                                      ---------         ---------         ---------
   Income before extraordinary item                                      10,076             6,953             4,616
Extraordinary item (Note 4)
   Loss on extinguishment of debt, net of income tax effect of
     1,419                                                                    -                 -            (2,314)
                                                                      ---------         ---------         ---------
Net income                                                              $10,076            $6,953            $2,302
                                                                      =========         =========         =========

Basic income per share before extraordinary item                          $1.72             $1.22             $1.02
Basic extraordinary item per share                                           -                  -             (0.51)
                                                                      ---------         ---------         ---------
Basic net income per share                                                $1.72             $1.22             $0.51
                                                                      =========         =========         =========

Weighted average common  shares outstanding                           5,867,338         5,703,601         4,547,527
                                                                      =========         =========         =========

Diluted income per share before extraordinary item                        $1.65             $1.17             $0.94
Diluted extraordinary item per share                                          -                 -             (0.47)
                                                                      ---------         ---------         ---------
Diluted net income per share                                              $1.65             $1.17             $0.47
                                                                      =========         =========         =========


Weighted average common and common share equivalents
   outstanding                                                        6,098,205         5,933,244         4,925,464
                                                                      =========         =========         =========
</TABLE>






The accompanying notes to consolidated financial statements are an integral part
of these consolidated statements.



                                       29
<PAGE>   30

                  Dayton Superior Corporation and Subsidiaries
               Consolidated Statements of Shareholders' Equity
                 Years Ended December 31, 1998, 1997 and 1996
                 (Amounts in thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                                                      
                                                                                                                      
                                                    Class A                    Class B               Class A          
                                                 Common Shares             Common Shares         Treasury Shares      
                                               -----------------          --------------         ---------------      
                                               Shares     Amount          Shares  Amount         Shares   Amount      
                                               ------     ------          ------  ------         ------   ------      
<S>                                           <C>          <C>        <C>         <C>          <C>        <C>        
Balances at December 31, 1995                  2,804,500  $ 17,483      485,500    $ 1,942      2,000     $  (81)     
Net income                                                                                                            
Foreign currency translation adjustment                                                                               
Excess pension liability adjustment                                                                                   
Exercise of warrants                            346,600       -                                                       
Conversion of Class B common shares
  into Class A common shares                    541,700      2,316     (541,700)    (2,316)                           
Conversion of Class A common shares
  into Class B common shares                 (1,522,550)   (10,123)   1,522,550     10,123                            
Retirement of Class A treasury shares            (2,000)       (81)                            (2,000)        81      
Issuance of common shares for cash, net
  of issuance costs (Note 6b)                 2,030,950     23,041                                                    
                                              ---------    -------    ---------     ------      -----      -----      
Balances at December 31, 1996                 4,199,200     32,636    1,466,350      9,749          -          -      
Net income                                                                                                            
Foreign currency translation adjustment                                                                               
Issuance of common stock in lieu of
  directors' fees                                 8,258        104                                                    
Issuance of common shares in
  conjunction with acquisition (Note 2)          26,254        346                                                    
Exercise of stock options, net                   28,094        300                                                    
                                              ---------    -------    ---------     ------      -----      -----      
Balances at December 31, 1997                 4,261,806     33,386    1,466,350      9,749          -          -      
Net income                                                                                                            
Foreign currency translation adjustment                                                                               
Excess pension liability adjustment                                                                                   
Issuance of common stock in lieu of
  directors' fees                                 6,363        124                                                    
Issuance of common shares in
  conjunction with acquisition (Note 2)         222,496      4,078                                                    
Exercise of stock options, net                    1,026         16                                                    
Conversion of Class B common shares
  into Class A common shares                    708,781      4,712     (708,781)    (4,712)                           
Purchase of Class A treasury shares                                                             7,298       (145)     
                                              ---------    -------    ---------     ------      -----      -----      
Balances at December 31, 1998                 5,200,472    $42,316      757,569     $5,037      7,298      $(145)     
                                              =========    =======    =========     ======      =====      =====      
<CAPTION>

                                               Cumulative                             
                                                 Foreign                              
                                                Currency       Excess                 
                                               Translation     Pension        Retained
                                               Adjustment     Liability       Earnings     Total
                                               ----------     ---------       --------     -----
<S>                                            <C>            <C>            <C>         <C>     
Balances at December 31, 1995                  $  (139)       $    (50)      $   8,330   $ 27,485
Net income                                                                       2,302      2,302
Foreign currency translation adjustment             (6)                                        (6)
Excess pension liability adjustment                                 50                         50
Exercise of warrants                                                                            -
Conversion of Class B common shares
  into Class A common shares                                                                    -
Conversion of Class A common shares
  into Class B common shares                                                                    -
Retirement of Class A treasury shares                                                           -
Issuance of common shares for cash, net
  of issuance costs (Note 6b)                                                              23,041
                                                 -----        --------         -------    -------
Balances at December 31, 1996                     (145)              -          10,632     52,872
Net income                                                                       6,953      6,953
Foreign currency translation adjustment            (46)                                       (46)
Issuance of common stock in lieu of
  directors' fees                                                                             104
Issuance of common shares in
  conjunction with acquisition (Note 2)                                                       346
Exercise of stock options, net                                                                300
                                                 -----        --------         -------    -------
Balances at December 31, 1997                     (191)              -          17,585     60,529
Net income                                                                      10,076     10,076
Foreign currency translation adjustment            (75)                                       (75)
Excess pension liability adjustment                                (15)                       (15)
Issuance of common stock in lieu of
  directors' fees                                                                             124
Issuance of common shares in
  conjunction with acquisition (Note 2)                                                     4,078
Exercise of stock options, net                                                                 16
Conversion of Class B common shares
  into Class A common shares                                                                    -
Purchase of Class A treasury shares                                                          (145)
                                                 -----        --------         -------    -------
Balances at December 31, 1998                    $(266)       $    (15)        $27,661    $74,588
                                                 =====        ========         =======    =======
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
                       of these consolidated statements.




                                       30
<PAGE>   31
                  Dayton Superior Corporation and Subsidiaries
                      Consolidated Statements of Cash Flows
                             Years Ended December 31

                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                               1998            1997            1996
                                                                              -------         -------         ------
<S>                                                                           <C>              <C>            <C>   
Cash Flows From Operating Activities:
  Net income                                                                  $10,076          $6,953         $2,302
  Adjustments to reconcile net income to net cash provided by
  operating activities:
    Extraordinary loss                                                            -               -            2,314
    Depreciation                                                               10,076           5,131          4,304
    Amortization of goodwill and intangibles                                    2,213           1,885          1,749
    Deferred income taxes                                                       1,792           1,017            320
    Amortization of debt discount and deferred financing costs                    821             565            235
    Gain on sales of rental equipment and property, plant and
       equipment                                                               (8,236)         (2,871)        (1,095)
  Change in assets and liabilities, net of effects of acquisitions:
    Accounts receivable                                                        (4,830)          3,111          1,610
    Inventories                                                                (2,110)            527           (884)
    Prepaid income taxes                                                        1,259            (865)           633
    Accounts payable                                                            3,991          (2,136)          (740)
    Accrued liabilities and other long-term liabilities                         5,487          (2,690)        (2,368)
    Other, net                                                                   (938)           (260)          (614)
                                                                              -------         -------         ------
         Net cash provided by operating activities                             19,601          10,367          7,766
                                                                              -------         -------         ------
Cash Flows From Investing Activities:
  Property, plant and equipment additions                                      (7,215)         (4,410)        (3,198)
    Proceeds from sale of fixed assets                                          1,097             -              -
  Rental equipment additions                                                  (18,081)         (4,875)        (1,632)
    Proceeds from sales of rental equipment                                    11,298           3,628          1,098
  Acquisitions, net of cash acquired (Note 2)                                  (1,784)        (33,467)        (4,845)
    Other investing activities                                                    -               (15)           (69)
                                                                              -------         -------         ------
         Net cash used in investing activities                                (14,685)        (39,139)        (8,646)
                                                                              -------         -------         ------
Cash Flows From Financing Activities:
  Repayments of long-term debt                                                 (4,276)        (67,203)       (41,656)
  Issuance of long-term debt                                                      -           100,000         22,819
    Prepayment premium on extinguishment of long-term debt                        -               -           (2,400)
  Issuance of common shares                                                       140             404         23,041
  Financing costs and fees                                                        -            (4,586)          (358)
  Purchase of treasury shares                                                    (145)            -              -
  Payments to former shareholder for acquisition of common shares                 -               -           (1,000)
                                                                               ------          ------         ------
         Net cash provided by (used in) financing activities                   (4,281)         28,615            446
                                                                               ------          ------         ------
Effect of Exchange Rate Changes on Cash                                           (75)            (46)            (6)
                                                                               ------          ------         ------
         Net increase (decrease) in cash                                          560            (203)          (440)
Cash, beginning of year                                                           -               203            643
                                                                               ------          ------         ------
Cash, end of year                                                                $560          $  -             $203
                                                                               ======          ======         ======
Supplemental Disclosures:
  Cash paid for income taxes                                                   $5,055          $4,919         $2,345
  Cash paid for interest                                                       10,763           4,736          6,582
  Issuance of  long-term debt to seller in conjunction with acquisition           -             5,000            -
  Issuance of Class A common shares in conjunction with acquisition             4,078             346            -
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
                       of these consolidated statements.


                                       31
<PAGE>   32
                  Dayton Superior Corporation and Subsidiaries
                 Consolidated Statements of Comprehensive Income
                            Years, Ended December 31

                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                     1998          1997          1996
                                                    ------        ------        ------

<S>                                                <C>            <C>           <C>   
Net income                                         $10,076        $6,953        $2,302
Other comprehensive income
     Foreign currency translation adjustment           (75)          (46)           (6)
     Excess pension liability adjustment               (15)            -            50
                                                    ------        ------        ------
Comprehensive income                                $9,986        $6,907        $2,346
                                                    ======        ======        ======
</TABLE>
































The accompanying notes to consolidated financial statements are an integral part
                       of these consolidated statements.





                                       32
<PAGE>   33


                  Dayton Superior Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements
                        December 31, 1998, 1997 and 1996
        (Dollar amounts in thousands, except share and per share amounts)


(1)      The Company

         The accompanying consolidated financial statements include the accounts
         of Dayton Superior Corporation and its wholly owned subsidiaries,
         Dayton Superior Canada Ltd., Dur-O-Wal, Inc., Dur-O-Wal, Ltd., and
         commencing September 29, 1997, Symons Corporation ("Symons")
         (collectively referred to as the "Company"). All significant 
         intercompany transactions have been eliminated.

         The Company is the largest North American manufacturer and distributor
         of metal accessories and forms used in concrete construction and of
         metal accessories used in masonry construction. As of December 31,
         1998, the Company has a distribution system consisting of a network of
         10 manufacturing/distribution plants and 47 service/distribution
         centers in the United States and Canada and over 4,000 dealers. The
         Company employs 749 salaried and 1,326 hourly personnel, of whom
         approximately 1,000 of the hourly personnel and six of the salaried
         personnel are represented by labor unions. One collective bargaining
         agreement expiring in 1999 covers 25 hourly employees at the Company's
         Des Plaines, IL facility. In 1998, hourly employees (45 as of December
         31, 1998) at the Company's Kankakee, IL facility voted to be
         represented by a labor union. As of December 31, 1998, no collective
         bargaining agreement was in place.

         The only significant difference between the Company's Class A Common
         Shares (1 vote per share) and its Class B Common Shares (10 votes per
         share) are the number of votes per share. The Company's Class B Common
         Shares are owned by Ripplewood Holdings L.L.C. ("Ripplewood").
         Ripplewood holds 13% of the Common Shares of the Company, which
         represents 59% of the voting rights as of December 31, 1998. See Note
         12 for subsequent event.

     (2) Acquisitions

         (a)      Symons Corporation- On September 29, 1997, the Company
                  purchased the stock of Symons. Symons was a private company,
                  which owned two businesses. The first business, the Symons
                  division, is a leading manufacturer of prefabricated concrete
                  forming systems. The second business, Richmond Screw Anchor,
                  manufactures and sells concrete accessories. The addition of
                  these two businesses provides the Company with both a
                  complementary fourth business platform, concrete forming
                  systems, and expansion in the concrete accessories market. The
                  Symons division is being operated on a stand alone basis while
                  the Richmond Screw Anchor business has been blended with the
                  Company's existing concrete accessories division. The Company
                  paid $34,000 (plus acquisition costs of $3,349) for the Common
                  Stock of Symons, of which $32,349 was paid in cash and $5,000
                  was paid by delivery of a seven year unsecured note. The
                  Company also assumed $47,670 of long-term debt. The purchase
                  agreement between the Company and the former stockholders of
                  Symons (the "Former Stockholders") relating to the Acquisition
                  (the "Purchase Agreement") provides for an adjustment to the


                                       33
<PAGE>   34

                  purchase price under certain circumstances. The Company has
                  advised the Former Stockholders that it believes it is
                  entitled to a purchase price adjustment in its favor, and the
                  Former Stockholders similarly advised the Company that they
                  believe they are entitled to a purchase price adjustment in
                  their favor. If the Company and the Former Stockholders are
                  unable to resolve these differences, the dispute will be
                  referred to a mutually satisfactory accounting firm, which is
                  expected to resolve such differences, in accordance with the
                  terms of the Purchase Agreement. On June 12, 1998, the Former
                  Stockholders filed a lawsuit in Delaware Chancery Court
                  seeking a determination with respect to a limited number of
                  issues involved in the dispute, which the Company believes can
                  be resolved only through arbitration. On October 28, 1998, the
                  Court granted the Company's motion to dismiss with respect to
                  certain of these issues. On December 28, 1998, the Court
                  stayed the proceeding with respect to the issues as to which
                  it had retained jurisdiction, pending the outcome of
                  arbitration commenced by the parties with respect to the
                  purchase price adjustment. Either party may seek to reopen the
                  proceedings following the arbitration. The Company intends to
                  vigorously pursue its rights under the Purchase Agreement.

                  The cash portion of the purchase price was paid from the
                  proceeds of the Company's credit agreement (Note 5). The
                  allocation of the purchase price to the net assets acquired is
                  as follows:


<TABLE>

<S>                                                                        <C>    
                  Current assets                                           $49,758
                  Rental equipment and property, plant
                  and equipment                                             55,283
                  Goodwill and intangible assets                             8,607
                  Other non-current assets                                   1,597
                  Current liabilities                                      (26,548)
                  Long-term debt                                           (47,670)
                  Other long-term liabilities                               (3,678)
                                                                           -------
                                                                           $37,349
                                                                           =======
</TABLE>

                 
                  The unaudited pro forma statements of income as though Symons
                  had been acquired as of the beginning of 1996 are as follows:

<TABLE>
<CAPTION>
                                                              1997          1996
                                                           ----------     ----------
<S>                                                         <C>            <C>     
                  Net sales                                 $252,326       $228,974
                  Gross profit                                91,167         76,450
                  Income before extraordinary item             6,867          5,406
                  Basic income per share before
                  extraordinary item                            1.20           0.95
                  Diluted income per share before
                  extraordinary item                            1.16           0.92
</TABLE>

                  The pro forma financial information is presented for
                  informational purposes only and is not necessarily indicative
                  of the operating results that would have occurred had the
                  Symons acquisition been consummated as of the above date, nor
                  are they necessarily indicative of future operating results.


                                       34
<PAGE>   35


         (b)      Cempro, Inc.- Effective January 1, 1999, the Company acquired
                  substantially all of the assets and assumed certain of the
                  liabilities of Cempro, Inc. for $5,400 in cash. The business
                  is being operated as a part of the Company's construction
                  chemicals business, which was established in early 1999.

         (c)      Secure, Inc.- In June 1998, the Company purchased
                  substantially all of the assets of Secure, Inc., a subsidiary
                  of The Lofland Company, for $654 in cash, including
                  acquisition costs of $50. This business is being operated as a
                  part of the Company's paving products division.

                  The acquisition has been accounted for as a purchase, and the
                  results of Secure have been included in the accompanying
                  consolidated financial statements since the date of
                  acquisition. The purchase price has been allocated based on
                  the estimated fair values of the assets including goodwill of
                  $50. Certain appraisals and evaluations are preliminary and
                  may change. Pro forma financial information is not required.

         (d)      Concrete Accessories, Inc.- In May 1998, the Company purchased
                  all of the stock of Concrete Accessories, Inc. (CAI). The
                  purchase price was $6,744, including acquisition costs of
                  $240, and was paid in cash of $421, assumption of long-term
                  debt of $2,245, and delivery of 222,496 Class A Common Shares
                  valued at $4,078. CAI is being operated as a part of the
                  Company's concrete forming systems division.

                  The acquisition has been accounted for as a purchase, and the
                  results of CAI have been included in the accompanying
                  consolidated financial statements since the date of
                  acquisition. The purchase price has been allocated based on
                  the estimated fair values of the assets acquired of $8,080,
                  including goodwill of $2,155, and assumed liabilities other
                  than long-term debt of $1,336. Certain appraisals and
                  evaluations are preliminary and may change. Pro forma
                  financial information is not required.

         (e)      Northwoods- In May 1998, the Company purchased the assets of
                  the Northwoods branches of Concrete Forming, Inc. for $750 in
                  cash. The Northwoods branches are being operated as a part of
                  the Company's concrete forming systems division.

                  The acquisition has been accounted for as a purchase, and the
                  results of the Northwoods branches have been included in the
                  accompanying consolidated financial statements since the date
                  of acquisition. The purchase price has been allocated based on
                  the estimated fair values of the assets acquired including
                  goodwill of $450. Certain appraisals and evaluations are
                  preliminary and may change. Pro forma financial information is
                  not required.

         (f)      Ironco Manufacturing Co., Inc.- In February 1997, the Company
                  acquired certain of the assets and assumed certain of the
                  liabilities of Ironco Manufacturing Co., Inc. and Birmingham
                  Bar Coating, Inc. The purchase price, including acquisition
                  costs, was $1,493 and was paid in cash of $1,147 and 26,254
                  Class A Common Shares.

                  The acquisition was accounted for as a purchase and the
                  results of the companies have been included in the
                  accompanying consolidated financial statements since the date
                  of acquisition. This purchase price has been allocated based
                  on the fair value of the assets 


                                       35
<PAGE>   36

                  acquired of $1,705, including goodwill of $504, and
                  liabilities assumed of $212. Pro forma financial information
                  is not required.

         (g)      Steel Structures, Inc.- In April 1996, the Company purchased
                  certain of the assets and assumed certain of the liabilities
                  of Steel Structures, Inc., for $5,601 in cash. The business is
                  being operated as a part of the Company's paving products
                  business.

                  The acquisition was accounted for as a purchase and the
                  results have been included in the accompanying consolidated
                  financial statements since the date of acquisition. This
                  purchase price has been allocated on the basis of the
                  appraised fair value of the assets acquired of $6,113,
                  including goodwill of $1,374, and liabilities assumed of $512.
                  Pro forma financial information is not required.


 (3)     Summary of Significant Accounting Policies

         (a)      Inventories- Substantially all inventories of the domestic
                  concrete accessories, paving products and masonry products
                  operations are stated at the lower of last-in, first-out
                  ("LIFO") cost (which approximates current cost) or market. All
                  other inventories of the Company are stated at the lower of
                  first-in, first-out ("FIFO") cost or market. The Company
                  provides net realizable value reserves which reflect the
                  Company's best estimate of the excess of the cost of potential
                  obsolete and slow moving inventory over the expected net
                  realizable value. The Company's inventories consist of raw
                  materials of $7,659 and $6,957, and finished goods of $30,022
                  and $26,792 as of December 31, 1998 and 1997, net of net
                  realizable value reserves of $1,623 and $876, respectively.
                  The Company has no LIFO reserve as of December 31, 1998 and
                  1997.

         (b)      Rental Equipment- Rental equipment is manufactured by the
                  Company for resale and for rent to others on a short-term
                  basis. Rental equipment is recorded at the lower of FIFO cost
                  or market and is depreciated over the estimated useful life of
                  the equipment, twelve to fifteen years, on a straight-line
                  method. The balances as of December 31, 1998 and 1997 are net
                  of accumulated depreciation of $6,796 and $2,496,
                  respectively. Rental revenues were $44,242, $11,336 and $3,095
                  for the years ended December 31, 1998, 1997, and 1996,
                  respectively. Cost of sales associated with rental revenues
                  were $4,443, $1,475, and $1,175 for 1998, 1997, and 1996,
                  respectively.

         (c)      Property, Plant and Equipment- Property, plant and equipment
                  are valued at cost and depreciated using straight-line and
                  accelerated methods over their estimated useful lives of 10-30
                  years for buildings and improvements and 3-10 years for
                  machinery and equipment.

                  Leasehold improvements are amortized over the lesser of the
                  term of the lease or the estimated useful life of the
                  improvement. Improvements and replacements are capitalized,
                  while expenditures for maintenance and repairs are charged to
                  expense as incurred.

         (d)      Goodwill and Intangible Assets- Goodwill and intangible assets
                  are recorded at the date of acquisition at their allocated
                  cost. Amortization is provided over the estimated useful 


                                       36
<PAGE>   37

                  lives of 40 years for goodwill, the term of the loan (5 to 8
                  years) for deferred financing costs and the term of the
                  agreement (1 to 5 years) for license agreements. Accumulated
                  amortization as of December 31, 1998 and 1997 was $16,867 and
                  $14,087, respectively.

                  In accordance with Statement of Financial Accounting Standard
                  No. 121, "Accounting for the Impairment of Long-Lived Assets
                  and for Long-Lived Assets to be Disposed Of" ("SFAS 121"), the
                  carrying value of goodwill and other long-lived assets is
                  assessed for recoverability by management when changes in
                  circumstances indicate that the carrying amount may not be
                  recoverable, based on an analysis of undiscounted future
                  expected cash flows from the use and ultimate disposition of
                  the asset.

         (e)      Income Taxes- Deferred income taxes are determined by applying
                  current statutory tax rates to the cumulative temporary
                  differences between the carrying value of assets and
                  liabilities for financial reporting and tax purposes.

         (f)      Environmental Remediation Liabilities- Effective January 1,
                  1997, the Company accounts for environmental remediation
                  liabilities in accordance with the American Institute of
                  Certified Public Accountants issued Statement of Position
                  96-1, "Environmental Remediation Liabilities," ("SOP 96-1").
                  Adoption of SOP 96-1 did not have a material impact on the
                  Company's consolidated financial statements.

         (g)      Foreign Currency Translation Adjustment- The financial
                  statements of foreign subsidiaries and branches are maintained
                  in their functional currency (Canadian dollars) and are then
                  translated into U.S. dollars. The balance sheets are
                  translated at end of year rates while revenues, expenses and
                  cash flows are translated at weighted average rates throughout
                  the year. Translation adjustments, which result from changes
                  in exchange rates from period to period, are accumulated in a
                  separate component of shareholders' equity. Transactions in
                  foreign currencies are translated into U.S. dollars at the
                  rate in effect on the date of the transaction. Changes in
                  foreign exchange rates from the date of the transaction to the
                  date of the settlement of the asset or liability is recorded
                  as income or expense.

         (h)      Net Income Per Share- Basic net income per share is computed
                  by dividing net income available to common shareholders by the
                  weighted average number of common shares outstanding (adjusted
                  for the stock split discussed in Note 6a) during the year.

                  Diluted net income per share is computed by dividing net
                  income available to common shareholders by the weighted
                  average number of common and common share equivalents
                  outstanding (adjusted for the stock split discussed in Note
                  6a) during the year. Common share equivalents include the
                  number of shares issuable upon the exercise of outstanding
                  options and warrants, less the shares that could be purchased
                  with the proceeds from the exercise of the options and
                  warrants, based on the Company's average trading price.



                                       37
<PAGE>   38


<TABLE>
                                                                                1998
                                                         -----------------------------------------------------
                                                            Income                Shares           Per Share
                                                         -------------     -----------------   ---------------
<S>                                                         <C>                 <C>                  <C>  
       Basic net income per share                           $10,076             5,867,338            $1.72
       Effect of stock options (Note 6c)                       -                  230,867
                                                         -------------     -----------------   ---------------
       Diluted net income per share                         $10,076             6,098,205            $1.65
                                                         =============     =================   ===============
<CAPTION>
                                                                                1997
                                                         -----------------------------------------------------
                                                            Income                Shares           Per Share
                                                         -------------     -----------------   ---------------
<S>                                                         <C>                 <C>                  <C>  
       Basic net income per share                           $6,953              5,703,601            $1.22
       Effect of stock options (Note 6c)                       -                  229,643
                                                         -------------     -----------------   ---------------
       Diluted net income per share                         $6,953              5,933,244            $1.17
                                                         =============     =================   ===============
<CAPTION>
                                                                                1996
                                                         -----------------------------------------------------
                                                            Income                Shares           Per Share
                                                         -------------     -----------------   ---------------
<S>                                                         <C>                 <C>                  <C>  
       Basic net income per share                           $2,302              4,547,527            $0.51
       Effect of stock options and warrants (Notes  
                 6b and 6c)                                    -                  377,937
                                                         -------------     -----------------   ---------------
       Diluted net income per share                         $2,302              4,925,464            $0.47
                                                         =============     =================   ===============
</TABLE>


         (i)      Financial Instruments- The Company uses interest rate swaps to
                  manage interest rate risk associated with its floating rate
                  borrowings. The swap agreements are contracts to exchange
                  floating rate for fixed rate interest payments periodically
                  over the life of the agreements without the exchange of the
                  underlying amounts. The differential paid or received on the
                  interest rate swap agreements is recognized as an adjustment
                  to interest expense.

         (j)      Revenue Recognition- The Company recognizes revenue on product
                  and rental equipment sales on the date of shipment. Rental
                  revenues are recognized ratably over the terms of the rental
                  agreements.

         (k)      Use of Estimates- The preparation of financial statements in
                  conformity with generally accepted accounting principles
                  requires management to make estimates and assumptions that
                  affect the reported amounts of assets and liabilities at the
                  balance sheet date and the reported amounts of revenues and
                  expenses during the year. Actual results could differ from
                  those estimates. Examples of accounts in which estimates are
                  used include the reserve for excess and obsolete inventory,
                  the allowance for doubtful accounts and sales returns and
                  allowances, the accrual for self-insured employee medical
                  claims, the self-insured product and general liability
                  accrual, the self-insured workers' compensation accrual,
                  accruals for litigation losses, the valuation allowance for
                  deferred tax assets, actuarial assumptions used in determining
                  pension benefits, and actuarial assumptions used in
                  determining other post-retirement benefits.

         (l)      Reclassifications- Certain reclassifications have been made to
                  prior years' amounts to conform to their 1998 classification.


                                       38
<PAGE>   39


(4)      Extraordinary Item

         During June 1996, the Company prepaid its $40,000 unsecured senior
         promissory notes. In conjunction therewith, the Company paid a
         prepayment premium of $2,400 and expensed unamortized financing costs
         and debt discount of $795 and $538, respectively. The Company recorded
         an extraordinary loss of $2,314, net of an income tax effect of $1,419.
         The Company funded this repayment with $22,358 in proceeds from its
         public stock offering (Note 6b) and $20,042 from its 1996 credit
         facility.

(5)      Credit Arrangements

         The Company has a Credit Agreement to provide for a term loan and
         revolving credit facility, each of which is secured by substantially
         all of the assets of the Company. The Company used the proceeds of the
         Credit Agreement to fund the acquisition of all outstanding shares of
         Symons and to repay all amounts outstanding on the existing term and
         revolving loans of both the Company and Symons. As a result, deferred
         financing costs of $255 related to the Company's term and revolving
         loans were expensed and reflected as interest expense in the
         accompanying 1997 statement of income.

         The $100,000 Term Loan requires quarterly interest payments, with
         principal amount due in 2005. The Term Loan permits the Company to
         choose from various interest rate options and has a weighted average
         interest rate of 8.15% at December 31, 1998.

         Amounts available under the Revolving Credit Facility are equal to the
         lesser of (i) $40,000 or (ii) the sum of (x) 85% of eligible accounts
         receivable, and (y) 60% of eligible inventories. The amount available
         under the Revolving Credit Facility was $40,000 at December 31, 1998.
         The Revolving Credit Facility will terminate in 2002, and has interest
         options based on (a) Bank One, Dayton, NA's prime rate (7.75% at
         December 31, 1998) plus an amount between 0% and 1% depending on the
         level of certain financial ratios (0.5% at December 31, 1998), or (b)
         LIBOR plus an amount between 0.75% and 2.00% depending on the level of
         certain financial ratios (1.50% at December 31, 1998). The weighted
         average interest rate at December 31, 1998 was 7.3%. A commitment fee
         of between 0.125% and 0.400% per annum will be payable on the average
         unused amount depending on the level of certain financial ratios (0.25%
         at December 31, 1998).

         Average borrowings under the Revolving Credit Facility and its
         predecessors were $19,679, $25,266, and $21,400, during 1998, 1997, and
         1996, respectively, at an approximate weighted average interest rate of
         7.7%, 7.6%, and 8.2%, respectively. The maximum borrowings outstanding
         during 1998, 1997, and 1996 were $26,620, $32,403, and $28,180,
         respectively.

         To manage its interest rate risk, the Company entered into two interest
         rate swap agreements on a total of $50,000 of long-term debt that fixed
         the LIBOR-based component of the interest rate formula. The swaps have
         a fixed ninety-day LIBOR component of 6.30% and 6.33%, and expire on
         November 1, 2000. The ninety-day LIBOR as of December 31, 1998 was
         5.07%. All fluctuations in rate resulting from the swaps are accounted
         for as interest expense. These swaps are required by the Company's
         Credit Agreement and are contracts to exchange floating rate for fixed
         rate interest payments without the exchange of underlying amounts.


                                       39
<PAGE>   40

         The Credit Agreement contains certain restrictive covenants, which
         require that, among other things, the Company maintain a minimum
         leverage ratio, a minimum fixed charge coverage ratio and limit its
         ability to pay dividends on Common Shares. The Company was in
         compliance with its loan covenants as of December 31, 1998.

         In conjunction with the acquisition of Symons, the Company issued a
         $5,000, seven-year unsecured note to one of the Former Stockholders.
         The note requires monthly interest payments, with principal due in
         September 2004. The note bears interest at a fixed rate of 10.5%.

         The Company has an Economic Development Loan from the city of Parsons,
         Kansas. The loan bears interest at 7.0% and is payable in quarterly
         installments of $8 through July 2005. The loan is secured by real
         estate in Parsons.

         Following is a summary of the Company's long-term debt as of December
         31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                            1998           1997
                                                                          --------        --------
<S>                                                                       <C>             <C>     
            Revolving lines of credit                                     $ 13,000        $ 15,000
            1997 Term Loan                                                 100,000         100,000
            Note payable to one of the Former Shareholders                   5,000           5,000
            City of Parsons, Kansas Economic Development Loan                  205             236
                                                                          --------        --------
            Total long-term debt                                           118,205         120,236
            Less current portion                                               (32)            (32)
                                                                          --------        --------
            Long-term portion                                             $118,173        $120,204
                                                                          ========        ========
</TABLE>

         Scheduled maturities of long-term debt are $32, $32, $32, $13,032, $32
         and $105,045 for 1999, 2000, 2001, 2002, 2003, and thereafter,
         respectively.

         The fair market value of the Company's fixed rate long-term debt is
         estimated using discounted cash flow analyses based on current
         incremental borrowing rates for similar types of borrowing
         arrangements. At December 31, 1998, the estimated fair value of the
         Note payable to Former Shareholder of Symons is $5,782. The estimated
         fair value of the City of Parsons, Kansas Economic Development Loan is
         $203. The estimated fair values of the Term Loan and Revolving Credit
         Facility approximate their face values, as these facilities have
         variable interest rates tied to market rates. The estimated fair value
         of the interest rate swap agreements is a liability of $1,242.


(6)      Common and Redeemable Preferred Shares

         (a)      Stock Split- In June 1996, the Company authorized a 50-for-1
                  stock split for Class A and B Common Shares. All references in
                  the financial statements to number of shares or share prices
                  have been restated to reflect the split.

         (b)      Public Offering of Company Shares- In June 1996, the Company
                  completed an initial public offering of 1,974,750 shares of
                  Class A Common Shares and received proceeds of $22,358, net of
                  expenses. The proceeds from the offering were used to prepay
                  long-term debt.


                                       40
<PAGE>   41

                  In July 1996, the underwriters of the Company's initial public
                  offering of Class A Common Shares exercised a portion of their
                  over-allotment option pursuant to which the Company issued
                  56,200 shares of Class A Common Shares and Ripplewood Holdings
                  L.L.C. converted 56,200 shares of its Class B Common Shares
                  into Class A Common Shares and sold those shares. The
                  Company's proceeds of $683 from the issuance of those shares
                  were used to reduce the outstanding balance of the existing
                  revolving line of credit.

                  If the offering, the amendment of the Company's credit
                  facility and the prepayment of the long-term debt had occurred
                  on January 1, 1996, income before extraordinary item for the
                  year ended December 31, 1996, would have been $5,561 and
                  income per share before extraordinary item would have been
                  $0.94.

         (c)      Stock Option Plans- The Company has five stock option plans,
                  the 1994 Stock Option Plan ("the 1994 Plan"), the 1995 Stock
                  Option Plan ("the 1995 Plan"), the 1996 Stock Option Plan
                  ("the 1996 Plan"), the 1997 Stock Option and Restricted Stock
                  Plan ("the 1997 Restricted Plan") and the 1997 Non-employee
                  Director Stock Option Plan ("the 1997 Director Plan"). Under
                  all Plans, the option exercise price equals the stock's market
                  price on date of grant. The Company accounts for these plans
                  under APB Opinion No. 25, under which no compensation costs
                  have been recognized. Had compensation cost for these plans
                  been determined consistent with Statement of Financial
                  Accounting Standards No. 123, "Accounting for Stock-Based
                  Compensation" ("SFAS 123"), the Company's net income and
                  earnings per share would have been reduced to the following
                  pro forma amounts:

<TABLE>
<CAPTION>
                                                                                            1998        1997          1996
                                                                                            ----        ----          ----
                
<S>                                                                                       <C>          <C>            <C>   
                    Income before extraordinary item available to  
                    common shareholders:                           As Reported            $10,076      $6,953         $4,616  
                                                                   Pro Forma                9,835       6,857          4,561  
                    Basic income per share before extraordinary    
                    item:                                          As Reported               1.72        1.22           1.02
                                                                   Pro Forma                 1.68        1.20           1.00
                    Diluted income per share before
                    extraordinary item:                            As Reported               1.65        1.17           0.94
                                                                   Pro Forma                 1.62        1.16           0.92
</TABLE>

                  Because the SFAS 123 method of accounting has not been applied
                  to options granted prior to January 1, 1995, the resulting pro
                  forma compensation cost may not be representative of that to
                  be expected in future years.

                  As of December 31, 1998, the Company may grant options for up
                  to 228,000 and 24,667 shares under the 1997 Restricted Plan
                  and the 1997 Director Plan, respectively. No further options
                  may be granted under the 1994, 1995 and 1996 Plans. The
                  Company granted 83,833 options during 1998, of which, 9,333
                  vested immediately, and the other 74,500 vest ratably over
                  three years. All options expire ten years after the date of
                  grant.


                                       41
<PAGE>   42

                  A summary of the status of the Company's stock option plans at
                  December 31, 1998, 1997, 1996 and 1995 and changes during the
                  years then ended is presented in the table and narrative
                  below:

<TABLE>
<CAPTION>
                                                                                Number of        Weighted Average Exercise
                                                                                  Shares              Price Per Share
                                                                              -------------      --------------------------
<S>                                                                              <C>                     <C>    
                   Outstanding at December 31, 1995                              272,750                 $  2.44
                   Granted at a fair value of $4.26                               25,000                   10.38
                                                                                 -------                  ------
                   Outstanding at December 31, 1996                              297,750                    3.11
                   Granted at a weighted average fair value of $5.25              31,000                   12.52
                   Exercised                                                     (40,000)                   4.17
                   Canceled                                                      (12,500)                  10.38
                                                                                 -------                  ------
                   Outstanding at December 31, 1997                              276,250                    3.57
                   Granted at a weighted average fair value of $6.83              83,833                   17.11
                   Exercised                                                      (2,050)                   2.46
                                                                                 -------                  ------
                   Outstanding at December 31, 1998                              358,033                  $ 6.75
                                                                                 =======                  ======
</TABLE>



         Price ranges and other information for stock options outstanding at
         December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                                  Outstanding                           Exercisable
                                                        --------------------------------------      ---------------------
                                                                   Weighted        Weighted                     Weighted
                                                                    Average         Average                      Average
                                                                   Exercise        Remaining                     Exercise
                    Range of Exercise Prices            Shares      Price            Life           Shares        Price
                    ------------------------            ------    ----------       -----------      ------        -------  
<S>                                                     <C>           <C>            <C>            <C>           <C>    
                    $ 1.96 - $ 4.00                     243,200       $  2.44        5.6 years      243,200       $  2.44
                    $12.50 - $12.63                      31,000         12.52        8.5             24,750         12.53
                    $16.81 - $19.91                      83,833         17.11        9.2              9,333         19.46
                                                        -------       -------        ---------      -------       -------
                                                        358,033       $  6.75        6.7 years      277,283       $  3.92
                                                        =======       =======        =========      =======       =======
</TABLE>



                  The fair value of each option grant is estimated on the date
                  of grant using the Black Scholes options pricing model with
                  the following weighted average assumptions used for grants in
                  1998, 1997, and 1996, respectively: risk-free interest rates
                  of 5.67% to 5.70%, 6.17% to 6.56%, and 6.11%; expected
                  dividend yield of 0%; expected lives of 6 years; and expected
                  volatility of 27.87%, 28.50%, and 27.96%.

         (d)      Treasury Shares- The Company has agreed to repurchase Class A
                  Common Shares issued to the former shareholders of CAI. Under
                  certain circumstances, the former shareholders may require the
                  Company to purchase Class A Common Shares at the previous
                  day's closing price per share. The aggregate value of the
                  purchases is limited to $250 during each three-month period
                  beginning December 1, 1998 and ending May 22, 1999. As of
                  December 31, 1998, 7,298 Class A Common Shares had been
                  repurchased for $145 under such agreement.

(7)      Retirement Plans

         (a)      Company-Sponsored Pension Plans- The pension plans cover
                  virtually all salaried and hourly employees not covered by
                  multi-employer pension plans and provide benefits of 


                                       42
<PAGE>   43

                  stated amounts for each year of credited service. The Company
                  funds such plans at a rate that meets or exceeds the minimum
                  amounts required by applicable regulations. The plans' assets
                  are primarily invested in mutual funds comprised primarily of
                  common stocks and corporate and U.S. government obligations.

                  Postretirement Benefits- The Company provides postretirement
                  health care benefits on a contributory basis and life
                  insurance benefits for Symons salaried and hourly employees
                  that retired prior to May 1, 1995.

<TABLE>
<CAPTION>
                                                                 PENSION         PENSION       OTHER      OTHER
                                                                 BENEFITS        BENEFITS     BENEFITS   BENEFITS
                                                                   1998            1997           1998      1997
                                                                 --------        --------     --------   --------
<S>                                                              <C>             <C>             <C>          <C>
                  CHANGE IN BENEFIT OBLIGATION
                  Benefit obligation at beginning of year        $ 29,169        $  6,796        $ 681        $ -
                  Service cost                                        619             794          -            -
                  Interest cost                                     1,630             845           71          -
                  Acquisition                                         -            21,194          -            694 
                  Amendments                                         (360)            -            312          -
                  Actuarial loss (gain)                               135              (1)        (128)         -
                  Benefits paid                                      (712)           (459)         (61)         (13)
                                                                 --------        --------     --------   ----------
                  Benefit obligation at end of year              $ 30,481        $ 29,169        $ 875        $ 681
                                                                 ========        ========     ========   ==========
                  CHANGE IN PLAN ASSETS
                  Fair value of plan assets at beginning
                  of year                                        $ 27,249        $  6,219      $   -         $  -
                  Actual return on plan assets                      2,402           1,085          -            -
                  Acquisition                                         -            19,707          -            -
                  Employer contribution                               216             697           61           13
                  Benefits paid                                      (712)           (459)         (61)         (13)
                                                                 --------        --------     --------   ----------
                  Fair value of plan assets at end of year       $ 29,155        $ 27,249      $   -        $   -
                                                                 ========        ========     ========   ==========

                  FUNDED STATUS                                  $ (1,326)       $ (1,920)       $(875)       $(681)
                  Unrecognized prior service cost                    (155)            202          288          -
                  Unrecognized net gain                              (759)           (150)        (124)         -
                                                                 --------        --------     --------   ----------
                  Net amount recognized                          $ (2,240)       $ (1,868)       $(711)       $(681)
                                                                 ========        ========     ========   ==========

                  AMOUNTS RECOGNIZED IN THE STATEMENT OF
                  FINANCIAL POSITION CONSIST OF:
                     Accrued benefit liability                   $ (2,440)       $ (1,868)       $(875)       $(681)
                     Intangible asset                                 185             -            163          -
                     Accumulated other comprehensive income            15             -            -            -
                                                                 --------        --------     --------   ----------
                  Net amount recognized                          $ (2,240)       $ (1,868)       $(712)       $(681)
                                                                 ========        ========     ========   ==========

                  ASSUMPTIONS AS OF DECEMBER 31
                  Discount rate                                      6.75%              7%        6.75%        8.25%
                  Expected return on plan assets                        8%              8%         N/A          N/A
                  Rate of compensation increase                         4%              4%         N/A          N/A

                  COMPONENTS OF NET PERIODIC BENEFIT COST
                  Service cost                                   $    619        $    794        $   -        $ -
                  Interest cost                                     1,630             845           70          -
                  Expected return on plan assets                   (1,655)           (898)          (4)         -
                  Amortization of prior service cost                   (3)             17           24          -
                  Recognized actuarial gain                            (3)            -            -            -
                                                                 --------        --------     --------   ----------
                  Net periodic cost                              $    588        $    758        $  90        $ -
                                                                 ========        ========     ========   ==========
</TABLE>

                                       43
<PAGE>   44

                  The projected benefit obligation, accumulated benefit
                  obligation, and fair value of plan assets for the pension
                  plans with accumulated benefit obligations in excess of plan
                  assets were $2,893, $2,855, and $2,692, respectively, as of
                  December 31, 1998 and $1,200, $1,200, and $1,060, respectively
                  as of December 31, 1997.

                  Assumed health care cost trend rates have a significant effect
                  on the amounts reported for the health care plan. A one
                  percentage point change in assumed health care cost trend
                  rates would have the following effects:

<TABLE>
<CAPTION>
                                                                             1 Percentage                1 Percentage
                                                                            Point Increase              Point Decrease
                                                                            --------------              --------------
<S>                                                                              <C>                        <C>  
                    Effect on total of service and interest cost components      $ 3                        $ (3)
                    Effect on the postretirement benefit obligation               46                         (43)
</TABLE>

         (b)      Multi-Employer Pension Plan- Approximately 12% of the
                  Company's employees are currently covered by collectively
                  bargained, multi-employer pension plans. Contributions are
                  determined in accordance with the provisions of negotiated
                  union contracts and generally are based on the number of hours
                  worked. The Company does not have the information available to
                  determine its share of the accumulated plan benefits or net
                  assets available for benefits under the multi-employer pension
                  plans. The aggregate amount charged to expense under these
                  plans was $287, $157, and $89, for the years ended December
                  31, 1998, 1997, and 1996, respectively.

         (c)      401(k) Savings Plan- Most employees are eligible to
                  participate in Company sponsored 401(k) savings plans. Company
                  matching contributions vary from 0% to 50% (on the first 2%)
                  according to terms of the individual plans and collective
                  bargaining agreements. The aggregate amount charged to expense
                  under these plans was $531, $345, and $295, for the years
                  ended December 31, 1998, 1997, and 1996, respectively.

         (d)      Retirement Contribution Account- During 1998, the Company
                  implemented a defined contribution plan for substantially all
                  salaried employees. No contributions are permitted by the
                  employees, and the Company contributes 1.5% to 6.0% of
                  eligible compensation, depending on the age of the employee.
                  The amount expensed for the year ended December 31, 1998 was
                  $1,167.

(8)      Income Taxes

         The following is a summary of the components of the Company's income
         tax provision for the years ended December 31, 1998, 1997, and 1996:

<TABLE>
<CAPTION>
                                                                   1998           1997          1996
                                                                  ------          ------        ------
<S>                                                               <C>             <C>           <C>   
                     Currently payable:
                          Federal                                 $5,312          $3,521        $2,201
                          State and local                          1,398             704           420
                     Deferred                                      1,534           1,052           917
                                                                  ------          ------        ------
                     Total provision                              $8,244          $5,277        $3,538
                                                                  ======          ======        ======
</TABLE>

                                       44
<PAGE>   45


         The effective income tax rate differs from the statutory federal income
         tax rate for the years ended December 31, 1998, 1997, and 1996 for the
         following reasons:

<TABLE>
<CAPTION>
                                                                   1998           1997          1996
                                                                   ----           ----          ---- 
<S>                                                                <C>            <C>           <C>  
                     Statutory income tax rate                     35.0%          34.0%         34.0%
                     State income taxes (net of federal
                          tax benefit)                              4.8            4.0           2.6
                     Nondeductible goodwill
                         amortization and other
                         permanent differences                      5.2            5.1           7.0
                     Other, net                                     -               -           (0.2)
                                                                   ----           ----          ----
                     Effective income tax rate                     45.0%          43.1%         43.4%
                                                                   ====           ====          ==== 
</TABLE>

         The components of the Company's future income tax benefits and deferred
tax liabilities as of December 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                                           1998           1997
                                                                          -------        ------- 
<S>                                                                      <C>             <C>     
                     Current deferred taxes:
                          Inventory reserves                             $     50        $  (657)
                          Accounts receivable reserves                      1,712          1,623
                          Alternative minimum tax credit
                              carryforwards                                     -            549
                          Accrued liabilities                               2,280          2,218
                          Other                                              (521)           (76)
                                                                          -------        ------- 
                              Total                                         3,521          3,657
                                                                          -------        ------- 

                     Long-term deferred taxes:
                          Accelerated depreciation                        (13,034)       (10,922)
                          Other long-term liabilities                       2,428          2,855
                          Other                                              (938)           (12)
                                                                          -------        ------- 
                              Total                                       (11,544)        (8,079)
                                                                          -------        ------- 
                              Net deferred taxes                          $(8,023)       $(4,422)
                                                                          =======        ======= 
</TABLE>

(9)      Segment Reporting

         The Company operates in four segments, each with a general manager:
         concrete accessories (Dayton/Richmond(R)), concrete forming systems
         (Symons(R)), paving products (American Highway Technology(R)) and
         masonry products (Dur-O-Wal(R)). The segments are differentiated by
         their products and services, all of which serve the construction
         industry.

         Sales between segments for the year ended December 31, 1998 are
         recorded at normal selling price by the selling division and at cost
         for the buying division, with the profit recorded as an intersegment
         elimination. For the years ended December 31, 1997 and 1996,
         intersegment sales were not significant. Segment assets include
         accounts receivable; inventories; property, plant, and equipment;
         rental equipment; and an allocation of goodwill. Corporate and
         unallocated assets include cash, prepaid income taxes, future tax
         benefits, and financing costs. Export sales and sales by non-U.S.
         affiliates are not significant. 


                                       45
<PAGE>   46

         Information about the profit (loss) of each segment and the
         reconciliations to the consolidated amounts for the years ended
         December 31, 1998, 1997, and 1996 is as follows:

<TABLE>
<CAPTION>
                                                                   1998             1997          1996
                                                                ---------       ---------       ---------

<S>                                                             <C>             <C>             <C>      
                  Concrete Accessories                          $ 128,119       $  92,251       $  76,637
                  Concrete Forming Systems                         99,471          21,066             -
                  Paving Products                                  30,967          29,177          21,930
                  Masonry Products                                 24,292          24,918          25,919
                                                                ---------       ---------       ---------
                  Net sales to external customers               $ 282,849       $ 167,412       $ 124,486
                                                                =========       =========       =========

                  Concrete Accessories                          $   3,348       $     -         $     -
                  Concrete Forming Systems                      $   5,240       $     -         $     -
                                                                ---------       ---------       ---------
                  Net sales to other segments                   $   8,588       $     -         $     -
                                                                =========       =========       =========

                  Concrete Accessories                          $   4,053       $   2,744       $   3,735
                  Concrete Forming Systems                          6,543           1,903             -
                  Paving Products                                     567             466             415
                  Masonry Products                                    540             443             679
                                                                ---------       ---------       ---------
                  Interest expense                              $  11,703       $   5,556       $   4,829
                                                                =========       =========       =========

                  Concrete Accessories                          $  19,387       $  13,723       $   9,477
                  Concrete Forming Systems                          6,133             364             -
                  Paving Products                                   1,677           1,377             906
                  Masonry Products                                    487               5             601
                  Intersegment Eliminations                        (4,153)            -               -
                  Corporate                                        (5,211)         (3,239)         (2,830)
                                                                ---------       ---------       ---------
                  Income before income taxes                    $  18,320       $  12,230       $   8,154
                                                                =========       =========       =========

                  Concrete Accessories                          $   3,383       $   2,618       $   2,892
                  Concrete Forming Systems                          4,992             891             -
                  Paving Products                                     379             311             142
                  Masonry Products                                  1,279           1,264           1,216
                  Corporate                                            43              47              54
                                                                ---------       ---------       ---------
                  Depreciation                                  $  10,076       $   5,131       $   4,304
                                                                =========       =========       =========

                  Concrete Accessories                          $   1,265       $   1,225       $   1,188
                  Concrete Forming Systems                            341              24             -
                  Paving Products                                     177             206             131
                  Masonry Products                                    430             430             430
                                                                ---------       ---------       ---------
                  Amortization of goodwill and intangibles      $   2,213       $   1,885       $   1,749
                                                                =========       =========       =========
</TABLE>



                                       46
<PAGE>   47


         Information regarding each segment's assets and the reconciliation to
         the consolidated amounts as of December 31, 1998 and 1997 is as
         follows:

<TABLE>
<CAPTION>
                                                                 1998          1997
                                                                ---------      ---------
<S>                                                            <C>            <C>       
                   Concrete Accessories                        $   93,898     $   91,952
                   Concrete Forming Systems                       116,064         90,796
                   Paving Products                                  9,445          9,134
                   Masonry Products                                26,115         25,316
                   Corporate and Unallocated                        8,098          9,732
                                                                ---------      ---------
                   Total Assets                                 $ 253,620      $ 226,930
                                                                =========      =========
</TABLE>

         Information regarding capital expenditures by segment and the
         reconciliation to the consolidated amounts for the years ended December
         31, 1998, 1997 and 1996 is as follows:

<TABLE>
<CAPTION>
                                                                  1998        1997        1996
                                                                -------      ------      ------
<S>                                                             <C>          <C>         <C>   
                  Concrete Accessories                          $ 3,348      $2,449      $2,335
                  Concrete Forming Systems                        2,044       1,231         -
                  Paving Products                                 1,200         401         379
                  Masonry Products                                  439         320         480
                  Corporate                                         184           9           4
                                                                -------      ------      ------
                  Property, Plant, and Equipment Additions      $ 7,215      $4,410      $3,198
                                                                =======      ======      ======

                  Concrete Accessories                          $ 2,860      $1,966      $1,632
                  Concrete Forming Systems                      $15,221      $2,909    $    -
                                                                -------      ------      ------
                  Rental Equipment Additions                    $18,081      $4,875      $1,632
                                                                =======      ======      ======
</TABLE>


(10)     Commitments and Contingencies

         (a)      Operating Leases- Rental expense for property, plant and
                  equipment (principally office and warehouse facilities and
                  office equipment) was $4,233, $2,758, and $1,899, for the
                  years ended December 31, 1998, 1997 and 1996, respectively.
                  Terms generally range from one to ten years and some contain
                  renewal options. The approximate aggregate minimum annual
                  rental commitments under non-cancelable operating leases are
                  $4,117, $3,321, $1,951, $1,637, $910, and $1,547 for 1999,
                  2000, 2001, 2002, 2003, and thereafter, respectively.

         (b)      Litigation- Symons is currently a defendant involved in a
                  civil suit brought by EFCO Corp., a competitor of Symons in
                  one portion of their business. EFCO Corp. alleged that Symons
                  engaged in false advertising, misappropriation of trade
                  secrets, intentional interference with contractual relations,
                  and certain other activities. After a jury trial, preliminary
                  damages of approximately $14,000 were awarded against Symons
                  in January 1999. The Company believes that there is no merit
                  to these allegations, remains committed to vigorously pursuing
                  post-trial motions and appeals, and is seeking to vacate the
                  judgments in their entirety. The Company believes that, in the
                  event the judgments against it are not completely set aside,
                  it has numerous substantial grounds for a successful appeal
                  and intends to vigorously pursue its appellate rights. A
                  successful appeal could result in judgment for Symons or a new
                  trial. Symons' liability, 


                                       47
<PAGE>   48

                  if any, cannot finally be determined until such time as all
                  rights of the parties have been exhausted or have expired by
                  lapse of time. The Company considers the ultimate outcome of
                  this litigation to be not estimable. Accordingly, the Company
                  has not recorded any liability for the resolution of this
                  suit. In the event the Company is unsuccessful in its
                  post-trial motions and appeals, it may have a material adverse
                  effect on its consolidated financial position, results of
                  operations, or cash flows.

                  Additionally, the Company is a defendant in other various
                  legal proceedings arising out of the conduct of its business.
                  While the ultimate outcome of these lawsuits cannot be
                  determined at this time, management is of the opinion that any
                  liability, notwithstanding recoveries from insurance, would
                  not have a material adverse effect on the Company's
                  consolidated financial position, results of operations, or
                  cash flows.

         (c)      Self-Insurance- The Company is self-insured for certain of its
                  group medical, workers' compensation and product and general
                  liability claims. The Company has stop loss insurance coverage
                  at various per occurrence and per annum levels depending on
                  type of claim. The Company consults with third party
                  administrators to estimate the reserves required for these
                  claims. No material revisions were made to the estimates for
                  the years ended December 31, 1998, 1997 and 1996. The Company
                  has reserved $4,737 and $4,578 as of December 31, 1998 and
                  1997, respectively.

(11)     Related Party Transactions

         During 1997, the Company paid Ripplewood a fee of $400 for financial
         advisory services in connection with the acquisition of Symons
         Corporation and related financing transactions.

         During 1996, the Company paid Ripplewood a management fee of $125. This
         fee was not charged after the initial public offering. The Company paid
         Ripplewood a fee of $600 at the time the initial public offering was
         completed for additional services provided in connection with the
         offering and related transactions. In addition, prior to 1997, the
         Company reimbursed Ripplewood for the allocable costs of certain
         insurance policies purchased by Ripplewood which covered both the
         Company and Ripplewood.

(12)     Subsequent Event (Unaudited)

         On February 17, 1999, Ripplewood informed the Company that it was
         converting all 757,569 Class B Common Shares held by it into an equal
         number of Class A Common Shares and sold those Class A Common Shares.
         As a result of the conversion, no Class B Common Shares remain
         outstanding.





                                       48
<PAGE>   49





(13)     Quarterly Financial Information (Unaudited)

<TABLE>
                                                                                    1998
                                                       ---------------------------------------------------------------
                                                        First        Second           Third         Fourth        Full
           Quarterly Operating Data                    Quarter       Quarter         Quarter        Quarter       Year
           ------------------------                    -------       -------         -------        -------       ----
<S>                                                    <C>            <C>            <C>           <C>         <C>     
           Net sales                                   $ 59,227        $76,754        $82,809       $64,059     $282,849
           Gross profit                                  20,254         28,441         34,174        25,557      108,426
           Net income (loss)                             (1,009)         3,731          6,226         1,128       10,076
           Basic net income (loss) per share(a)        $  (0.18)       $  0.64        $  1.05       $  0.19     $   1.72
           Diluted net income (loss) per share(a)      $  (0.18)       $  0.61        $  1.01       $  0.18     $   1.65
           Stock Price:
              High                                      $20.375        $22.125        $21.375       $20.875     $ 22.125
              Low                                       $15.875        $16.500        $16.625       $14.375     $ 14.375
<CAPTION>
                                                                                    1997
                                                       ---------------------------------------------------------------
                                                        First        Second         Third          Fourth        Full
           Quarterly Operating Data                    Quarter       Quarter        Quarter        Quarter       Year
           ------------------------                    -------       -------        -------        -------       ----
<S>                                                     <C>            <C>            <C>           <C>         <C>     
           Net sales                                    $25,980        $39,839        $42,592       $59,001     $167,412
           Gross profit                                   7,708         12,933         14,381        21,862       56,884
           Net income                                       160          2,951          3,393           449        6,953
           Basic net income per share(a)                $  0.03        $  0.52        $  0.60       $  0.08     $   1.22
           Diluted net income per share(a)                $0.03        $  0.51        $  0.58       $  0.08     $   1.17
           Stock Price:
                  High                                  $13.500        $13.250        $19.438       $19.000     $ 19.438
                  Low                                   $11.250        $ 9.750        $12.500       $14.813     $  9.750
</TABLE>



(a)      The total of the quarterly income (loss) per share before extraordinary
         item does not equal the annual income per share before extraordinary
         item due to the timing of the issuance of the Company's Common Shares
         and the omission of common share equivalents in quarters with net
         losses for 1998 and due to rounding and to fluctuations in the
         Company's stock price for 1997.



                                       49
<PAGE>   50


                  Dayton Superior Corporation and Subsidiaries
                 Schedule II - Valuation and Qualifying Accounts
                  Years Ended December 31, 1998, 1997 and 1996

                             (Amounts in thousands)


<TABLE>
<CAPTION>
                                                               Additions                     Deductions
                                                      -------------------------       --------------------
                                                                                      Charges for   
                                                         Charged                         Which                     
                                         Balance at    (Credited)                       Reserves                   Balance 
                                          Beginning   to Costs and      Other             Were                     at End  
                                           of Year      Expenses      Additions         Created      Other         of Year 
                                         ----------   ------------    ---------       ----------    ------        --------
                                                                                                                   
<S>                                        <C>           <C>         <C>             <C>           <C>              <C>   
Allowances for Doubtful Accounts and
Sales Returns and Allowances

For the year ended December 31, 1998       $5,015        3,086          -            (2,422)       (1,247)(2)       $4,432


For the year ended December 31, 1997       $  449           27        4,788(1)         (249)          -             $5,015


For the year ended December 31, 1996       $  708         (191)         -               (68)          -             $  449
</TABLE>



(1) Acquisition of Symons Corporation

(2) Reduction of amount from acquisition of Symons Corporation



                                       50
<PAGE>   51

ITEM 9.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
               FINANCIAL DISCLOSURE.

               Not applicable.

                                    PART III

ITEM 10.       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

               The information required by this Item 10 is incorporated herein
by reference to the information under the headings "Nominees" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Company's Proxy Statement for
the Annual Meeting of Shareholders scheduled to be held on May 12, 1999, except
for certain information concerning the executive officers of the Company, which
is set forth at the end of Part I of this Annual Report.

ITEM 11.       EXECUTIVE COMPENSATION.

               The information required by this Item 11 is incorporated by
reference to the information under the headings "Compensation Committee
Interlocks and Insider Participation in Compensation Decisions," "Executive
Compensation," "Report of Compensation and Benefits Committee on Executive
Compensation" and "Performance Graph" in the Company's Proxy Statement for the
Annual Meeting of Shareholders scheduled to be held on May 12, 1999.


ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

               The information required by this Item 12 is incorporated herein
by reference to the information under the heading "Ownership of Common Shares"
in the Company's Proxy Statement for the Annual Meeting of Shareholders
scheduled to be held on May 12, 1999.


ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

               Not applicable.






                                       51
<PAGE>   52


                                     PART IV

ITEM 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

               (a)(1) FINANCIAL STATEMENTS The following consolidated financial
statements of the Company and subsidiaries are incorporated by reference as part
of this Report under Item 8.

               Report of Independent Public Accountants

               Consolidated Balance Sheets as of December 31, 1998 and 1997.

               Consolidated Statements of Income for the years ended December
               31, 1998, 1997, and 1996.

               Consolidated Statements of Shareholders' Equity for the years
               ended December 31, 1998, 1997, and 1996.

               Consolidated Statements of Cash Flows for the years ended
               December 31, 1998, 1997, and 1996.

               Consolidated Statements of Comprehensive Income for the years
               ended December 31, 1998, 1997, and 1996.

               Notes to Consolidated Financial Statements.

               (a)(2)  FINANCIAL STATEMENT SCHEDULE

               Schedule II - Valuation and Qualifying Accounts (at Item 8 of
               this Report)

               All other schedules are omitted because they are not applicable,
or not required, or because the required information is included in the
consolidated financial statements or notes thereto.

               (a)(3) EXHIBITS. See Index to Exhibits following the signature
pages to this Report for a list of exhibits.

               (b) Reports on Form 8-K. During the quarter ended December 31,
               1998, the Company filed the following Current Reports on Form
               8-K:

               CURRENT REPORT ON FORM 8-K. dated December 31, 1998 reporting
               under Item 5 (Other Events) a jury verdict rendered against
               Symons Corporation.



                                       52
<PAGE>   53



                                   SIGNATURES

               Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Dayton Superior Corporation has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                       DAYTON SUPERIOR CORPORATION

               March 30, 1999

                                       By /s/ John A. Ciccarelli
                                          ----------------------
                                          John A. Ciccarelli
                                          President and Chief Executive Officer

               Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on behalf of
Dayton Superior Corporation and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
            NAME                      TITLE                                    DATE

<S>                             <C>                                         <C>
/s/ John A. Ciccarelli          Director, President and Chief Executive     March 30, 1999
----------------------------    Officer
John A. Ciccarelli

/s/ Alan F. McIlroy             Vice President and Chief Financial Officer  March 30, 1999
----------------------------    (Principal Financial Officer)
Alan F. McIlroy                 

/s/ Thomas W. Roehrig           Corporate Controller                        March 30, 1999
----------------------------    (Principal Accounting Officer)
Thomas W. Roehrig               

/s/ Matthew O. Diggs, Jr.       Non-Executive Chairman of the Board         March 30, 1999
----------------------------
Matthew O. Diggs, Jr.

/s/ William F. Andrews          Director                                    March 30, 1999
----------------------------
William F. Andrews

/s/ Timothy C. Collins          Director                                    March 29, 1999
----------------------------
Timothy C. Collins

/s/ Matthew M. Guerreiro        Director                                    March 23, 1999
----------------------------
Matthew M. Guerreiro

/s/ Robert B. Holmes            Director                                    March 30, 1999
----------------------------
Robert B. Holmes
</TABLE>






                                       53
<PAGE>   54





                                INDEX OF EXHIBITS
                                -----------------

  Exhibit No.                    Description

   (3)      ARTICLES OF INCORPORATION AND BY-LAWS

            3.1    Amended Articles of Incorporation of the Company
                   [Incorporated herein by reference to Exhibit 3.2 to the
                   Company's Registration Statement on Form S-1 (Reg. No.
                   333-2974).]                                                +
                 
            3.2    Code of Regulations of the Company (as amended)
                   [Incorporated herein by reference to Exhibit 3.3 to the
                   Company's Registration Statement on Form S-1 (Reg. No.
                   333-2974).]                                                +
                
   (4)      INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
            INDENTURES 

            4.1    Senior Unsubordinated Redeemable Note of the Company in
                   the principal amount of $5,000,000. [Incorporated herein
                   by reference to Exhibit A to the Agreement set forth as
                   Exhibit 2.1 to the Company's Current Report on Form 8-K
                   dated June 2, 1997.]                                       +
                  
            4.2    Credit Agreement dated as of September 29, 1997 among
                   the Company and the other parties thereto. [Incorporated
                   herein by reference to Exhibit 4.2 to the Company's
                   Current Report on Form 8-K dated October 13, 1997.]        +
                  
            4.2.1  First Amendment to Credit Agreement dated as of October
                   23, 1997                                                   **
                  
            4.2.2  Third (sic) Amendment to Credit Agreement dated as of
                   June 26, 1998 [Incorporated herein by reference to
                   Exhibit 4.1 to the Company's Quarterly Report on Form
                   10-Q for the Quarter ended July 3, 1998].                  +
                 

  (10)      MATERIAL CONTRACTS

            10.1   1994 Stock Option Plan [Incorporated herein by reference
                   to Exhibit 10.9 to the Company's Registration Statement
                   on Form S-1 (Reg. No. 333-2974).]                          +*

            10.1.1 First Amendment to 1994 Stock Option Plan [Incorporated
                   herein by reference to Exhibit 10.1 to the Company's
                   Quarterly Report on Form 10-Q for the Quarter ended
                   September 26, 1997.]                                       +*

            10.2   1995 Stock Option Plan [Incorporated herein by reference
                   to Exhibit 10.10 to the Company's Registration Statement
                   on Form S-1 (Reg. No. 333-2974).]                          +*


                                       54
<PAGE>   55


            10.2.1 First Amendment to 1995 Stock Option Plan [Incorporated
                   herein reference to Exhibit 10.2 to the Company's
                   Quarterly Report on Form 10-Q for the Quarter ended
                   September 26, 1997.]                                       +*

            10.3   1996 Stock Option Plan [Incorporated herein by reference
                   to Exhibit 10.12 to the Company's Registration Statement
                   on Form S-1 (Reg. No. 333-2974).]                          +*

            10.4   1997 Stock Option and Restricted Stock Plan [Incorporated 
                   herein by reference to Exhibit 10.1 to the Company's 
                   Quarterly Report on Form 10-Q for the Quarter ended 
                   June 27, 1997.]                                            +*

            10.5   1997 Nonemployee Director Stock Option Plan
                   [Incorporated herein by reference to Exhibit 10.2 to the
                   Company's Quarterly Report on Form 10-Q for the Quarter
                   ended June 27, 1997.]                                      +*

            10.6   Nonemployee Directors Compensation Program [Incorporated
                   herein by reference to Exhibit 10.1 to the Company's
                   Quarterly Report on Form 10-Q for the Quarter ended July
                   3, 1998.]                                                  +*

            10.7   Management Incentive Plan                                   *

            10.8   Agreement dated as of May 9, 1997 by and among Symons
                   Corporation, the stockholders of Symons Corporation and
                   the Company. [Incorporated herein by reference to
                   Exhibit 2.1 to the Company's Current Report on Form 8-K
                   dated June 2, 1997.]                                       +

  (21)      SUBSIDIARIES OF THE REGISTRANT
            21.1     Subsidiaries of the Company                              **

  (23)      CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS                         **

  (99)      FINANCIAL DATA SCHEDULE
            99.1     Financial Data Schedule                                  **

----------------------------
*  Compensatory plan, contract or arrangement in which one or more directors or
   named executive officers participates.
** Filed herewith
 + Previously filed



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